AT&T posts lackluster Q4 2008 financials despite iPhone 3G successes

att-logoThe iPhone 3G has been a boon for the second-largest US wireless carrier. With over 4.3 million iPhone 3G activations since it’s launch, the iPhone 3G has brought in more than its fair share of subscribers and new revenue to AT&T coffers. Unfortunately, even the 1.9 million iPhone 3G activations that AT&T pushed through in the fourth quarter of last year weren’t enough to boost AT&T’s Q4 earnings into growth territory.

AT&T has posted its Q4 2008 financial report online, and it seems hard economic times have affected the carrier’s bottom line. AT&T’s wireless network infrastructure upgrades (costing some $453 million), aimed at improving 3G data performance for smartphones like the iPhone 3G, dragged down AT&T’s fourth quarter results. The carrier saw a 10% year-on-year decline in their per-share earnings – $0.64 in Q4 2008 compared with $0.71 in Q4 2007. AT&T also saw a 21% sequential decline in Q4 activations compared to Q3 2008.

On the upside, iPhone 3G owners bring in 60% more revenue per user than any other segment of AT&T’s customer-base. AT&T saw overall post-paid ARPU (average revenue per user) growing 3.9% year-on-year to $59.59, while data ARPU grew an impressive 35.7% year-on-year (10.9% sequentially). Add to that the fact that 40% of new iPhone activations came from other carriers, and it’s clear that the iPhone 3G has done good by AT&T. It’s just too bad the iPhone 3G didn’t help AT&T achieve the kind of growth numbers that rival carrier Verizon was so happy to report the other day.

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