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For AT&T and VZW, the subs just keep on coming

As total wireless penetration nears 100%, big 2 operators show no sign of slowing growth

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No matter how bad things are at Sprint, it’s not shedding 3 million customers a quarter, though it has yet to report second-quarter numbers. Aside from Sprint, all of the other major operators have reported net gains in recent quarters, and even smaller operators like Leap Wireless and MetroPCS are seeing record growth.

Some of that growth may be coming from data. Though data is often looked at as an incremental revenue stream designed to increase monthly ARPU and offset lower voice pricing, it may also be contributing more to carriers’ subscriber bases. AT&T reported that its mobile Internet access revenue doubled year-over-year in the second quarter. Since pricing for laptop card subscriptions has either remained static or fallen, it stands to reason that the number of laptop broadband subscribers to AT&T’s 3G network has more than doubled in the last year. Email revenues also increased more than 50% year-over-year, much of which can be ascribed to new BlackBerry and other smartphone email plans, which more often than not customers subscribe to in addition to their personal services. AT&T, however, doesn’t break down the numbers of its different types of data subscribers, so the exact impact of new email and broadband plans are unknown.

AT&T’s overall data revenue jumped 52% year-over-year to $2.5 billion. Data now accounts for 22.9% of all wireless service revenues as opposed to 17.3%. A good deal of those increases, however, have mainly served to offset declining voice revenues per subscriber. AT&T’s monthly ARPU per postpaid subscriber increased 3.5% year-over-year despite the influx of new data revenues. Much of that data growth was accomplished largely without the benefit of AT&T’s new 3G network, which now spans 300 markets. Only 18% or 13 million of AT&T’s 71 million subscribers have 3G-capable devices, meaning much of AT&T’s data intake comes from devices operating on the GPRS/Edge network. Messaging is believed to make up the bulk of all carriers’ data traffic, but AT&T has also enjoyed the benefit of the iPhone for more than a year now, which has not only driven up subscriber levels but boosted subscriptions to data access plans.

The new 3G iPhone went on sale in the current quarter and isn’t yet reflected in AT&T’s numbers. But some analysts predicted that AT&T distributed as many as 400,000 of the 1 million iPhones sold globally in the device’s premier weekend. AT&T said that 40% of iPhone 3G buyers were new to AT&T, meaning in the coming quarters the iconic device is likely to improve the operator’s numbers threefold: boosting overall subscribers, overall data revenues and 3G penetration.


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