AT&T reported earnings 21% lower than a year ago, and the result appears to be linked with the dynamics of its mobile business. While AT&T activated almost a million iPhones going to new customers, it showed only about half that number in net subscriber growth. That means the provider would have lost half-a-million customers had it not been for the iPhone. Nearly 2 million current customers converted to the iPhone, again showing how much AT&T has come to depend on the product.
There has been considerable speculation that AT&T would lose exclusivity for the iPhone, but whether or not it does, the giant mobile carrier appears to be losing the initiative. Being a conduit for consumer electronics is hardly a glamorous mission.
UBS is also reporting that AT&T’s capex plans are somewhat under expectation, which may indicate the company isn’t going to be as aggressive in network modernization under the increasingly constrained financial situation.
The fact that there are rumors Apple is going into the hosting business for over-the-top (OTT) applications associated with the iPhone and iPad (which we think is a given, not a rumor) isn’t going to help AT&T, who may see that cutting off its own service-layer opportunities in monetizing its iPhone success