AT&T has reported a 2.1% drop in net income for the three months ending June 2013, to $3.82 billion, as rising costs ate into its revenues.
The telecoms giant flagged a 1.6% increase in consolidated revenues, to $32.1 billion, thanks to strong sales of wireless products including smartphones and mobile data plans.
The company boasted net contract additions in its postpaid wireless business of 551,000, up from just 296,000 in the three months ending March and 320,000 a year earlier, and said the performance was its best in a second quarter in four years.
Some 35% of postpaid smartphone users are now on 4G LTE plans, with smartphone data usage per device up 50% year on year.
“This was a solid quarter for revenue and customer additions across our key growth platforms,” said Randall Stephenson, AT&T’s (Dallas, TX, USA) chief executive. “Our 4G LTE network is the fastest and the most reliable in the nation and deployment is ahead of schedule. That contributed to a step-up in postpaid subscriber gains, and strong mobile data revenue growth of nearly 20%.”
Overall mobile revenues were up by 5.7%, compared with the same period last year, but AT&T’s wireline business performed less impressively, recording a 0.9% dip in revenues between the second quarters of 2012 and 2013.
Although its U-verse TV and high-speed internet businesses are still flourishing, AT&T continues to lose traditional telephony customers migrating to mobile or internet-based alternatives.
Nevertheless, the performance of the contract wireless business will be welcomed by analysts concerned about rising levels of competition in the US market.
Number-four player T-Mobile (Bellevue, WA, USA) has upped the pace at which it is rolling out its own LTE network in a bid to challenge the market leaders, and recently began selling a range of no-contract service plans designed to put pressure on AT&T and Verizon Wireless (New York City, NY, USA), the two biggest players.
It has also completed a merger with MetroPCS (Richardson, TX, USA) – previously the fifth-biggest operator – aimed at bolstering its LTE capability in core markets.
Along with Verizon Wireless, AT&T has responded by unveiling prepaid data plans of its own and is also working to improve its spectrum position.
It recently bought a swathe of spectrum in the Mississippi Valley region from US Cellular.
The operator claims its LTE network now covers more than 225 million people in the US and is aiming to cover more than 270 million in 400 markets by the end of the year.