AT&T talked up the addition of wireless customers at home and the prospects for its new network in Mexico during its Q2 2015 financial announcement.
The operator reported 2.1 million net additions, of which 1.4 million was connected devices. This rated as its second best quarter for connected-device figures, which included 1 million connected cars. There were also 410,000 postpaid and 331,000 postpaid net additions.
However, the 410,000 figure for postpaid net adds is a 60 per cent fall from the same period of 2014 when it delivered over 1 million postpaid net additions.
Q2 wireless revenue was $18.3 billion, an increase of 2.1 per cent growth. The driver for growth was equipment sales which jumped 14.6 per cent to $3.2 billion, while service revenue at $15.1 billion was flat. Customer take-up in installment payments for handsets, as well as BYOD schemes, rather than subsidised devices, drove equipment sales.
The second quarter also saw AT&T announce a $3 billion investment in Mexico, as it searches for new revenue growth. Its aim is to cover 100 million potential customers with a 4G network by end-2018. The last three months also saw completion of the Nextel Mexico acquisition and the integration of Iusacell, the fourth and third largest operator in the country, respectively.
Second-quarter consolidated revenue, including fixed as well as wireless businesses, was $33 billion, up 1.4 per cent.
Net income dropped 13 per cent to $3.15 billion. Operating income was actually larger than the year-ago quarter ($5.7 billion against $5.6 billion) but the 2014 numbers were boosted by Other Income, which included a one-time gain from the sale of AT&T’s America Movil stake.
“These results reaffirm our transformation strategy,” said Randall Stephenson, AT&T chairman and CEO. “We grew revenues, expanded margins and delivered double-digit adjusted EPS and cash flow growth.”
“We added more than 2 million new wireless subscribers as the repositioning of our smartphone base nears completion. We also began expanding high-quality, high-speed wireless service to Mexican consumers and businesses.”