TMCnet LOGIN
Webinars
TMCnews Featured Article
October 23, 2009
AT&T Results Point to Next Wave of Growth
By Gary Kim, Contributing Editor
AT&T's (News - Alert) revenue mix is increasingly weighted to the growth areas of wireless, data, and managed services. In the third quarter, 68 percent of its revenues came from these categories, for example. In the third quarter of 2007, wireless and data represented 58 percent of revenues.
In the most-recent quarter, 44 percent of revenue was produced by wireless, about 24 percent by wireline data and managed services, six percent by advertising and other revenue sources, while 26 percent was contributed by wireline voice.
Wireless revenue grew 3.5 percent sequentially and 10 percent year over year. Wireline data revenue grew two percent sequentially and 5.4 percent year over year.
Wireline data revenues grew nearly five percent sequentially and a whopping 18.7 percent year over year. Wireline voice declined about four percent sequentially and a huge 14.5 percent year over year.
Obviously, the big strategic challenge is managing the transition from wireless voice to wireless data. Wireless is the single biggest growth driver, and 29 percent of that revenue now comes from data services, the balance from voice.
Over a period of time, AT&T will see a decline in wireless voice and must counterbalance that by continued growth of wireless data. The 3.2 million Apple iPhone (News - Alert) activations in the third quarter helped, in that regard.
And AT&T seems to believe that the next wave of wireless growth will come not from a successor to the iPhone, but from ebook readers, personal navigation devices and netbook accounts. What all these devices have in common is that they are not "phones."
They represent a half step towards a future growth model driven by wireless-enabled machines, rather than devices directly used by people. Still, it is signficant that all the devices seen as driving the next wave of growth are "data" devices, not "voice" devices.
"As you know, we are going through a significant transformation in the business, both with respect to consumer and business customers, where we are seeing declines in voice and some legacy data services, but we are seeing some substantial growth in broadband and IP based and managed services," says Richard Lindner, AT&T CFO.
In the most-recent quarter, 44 percent of revenue was produced by wireless, about 24 percent by wireline data and managed services, six percent by advertising and other revenue sources, while 26 percent was contributed by wireline voice.
Wireless revenue grew 3.5 percent sequentially and 10 percent year over year. Wireline data revenue grew two percent sequentially and 5.4 percent year over year.
Wireline data revenues grew nearly five percent sequentially and a whopping 18.7 percent year over year. Wireline voice declined about four percent sequentially and a huge 14.5 percent year over year.
Obviously, the big strategic challenge is managing the transition from wireless voice to wireless data. Wireless is the single biggest growth driver, and 29 percent of that revenue now comes from data services, the balance from voice.
Over a period of time, AT&T will see a decline in wireless voice and must counterbalance that by continued growth of wireless data. The 3.2 million Apple iPhone (News - Alert) activations in the third quarter helped, in that regard.
And AT&T seems to believe that the next wave of wireless growth will come not from a successor to the iPhone, but from ebook readers, personal navigation devices and netbook accounts. What all these devices have in common is that they are not "phones."
They represent a half step towards a future growth model driven by wireless-enabled machines, rather than devices directly used by people. Still, it is signficant that all the devices seen as driving the next wave of growth are "data" devices, not "voice" devices.
"As you know, we are going through a significant transformation in the business, both with respect to consumer and business customers, where we are seeing declines in voice and some legacy data services, but we are seeing some substantial growth in broadband and IP based and managed services," says Richard Lindner, AT&T CFO.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Patrick Barnard
