Update: AT&T reports $3 billion net income, fueled by mobile, broadband

AT&T reported net income of $3 billion for the fourth quarter of 2009, up nearly 26 percent from the fourth quarter of 2008, largely due to increases in mobile subscribers.

Revenue, however, fell slightly, from $31.1 billion in the fourth quarter of 2008 to $30.9 billion in the fourth quarter of 2009. Earnings per share was $0.51, meeting the expectations of analysts polled by Thomson Reuters.

Mobile and broadband growth fueled the increase in net income, the company said. The company added 2.7 million mobile customers in the fourth quarter, the second highest quarterly increase in AT&T history, the company said in a news release.

The increases were driven by “rapid” adoption of smartphones such as Apple’s iPhone, e-readers and netbooks, AT&T said. Mobile operating revenue increased by 7.6 percent between the fourth quarter of 2008 and the fourth quarter of 2009, from $12.9 billion to $13.8 billion.

The company activated 3.1 million iPhones during the quarter, officials said. AT&T will offer service for Apple’s new iPad tablet computer, the company said.

“We’re excited about the device, and we worked closely with Apple for planning for its connectivity on our network,” said John Stankey, president and CEO of AT&T Operations. “We have a thorough technical understanding with a good read on the iPad’s usage requirements and characteristics.”

Mobile data revenue increased by 26.3 percent to $3.9 billion, AT&T said.

“We had a solid 2009 and led the industry in the biggest growth driver — mobile broadband,” Randall Stephenson, AT&T chairman and CEO, said in a statement. “Looking ahead, customer demand for connectivity, particularly mobile broadband and IP data, continues to be strong, and AT&T is well-positioned at the center of this growth.”

AT&T will add significant mobile capacity during 2010, Stankey said. The company has been the target of ads, with rival Verizon Wireless claiming its wireless 3G network is more extensive than AT&T’s.

AT&T’s 3G network covers 75 percent of the U.S. population, and the company added 1,900 new cell sites in 2009, Stankey said during a conference call. The company plans capital expenditures of $18 billion to $19 billion in 2010, up 5 percent to 10 percent from 2009, with mobile service the top priority, he said.

AT&T will add twice the wireless capacity to its network in 2010 than it did in 2009, and it will add 2,000 new cell sites, he said.

The company is also rolling out version 7.2 of HSDPA (High-Speed Downlink Packet Access), an enhanced 3G communications protocol, in 2010. HSDPA works with AT&T’s GSM (Global System for Mobile Communications) technology, but not Verizon’s CDMA (Code Division Multiple Access), he said.

HSDPA 7.2 is “today’s real opportunity to increase speed,” Stankey said. The 7.2 version could double the theoretical peak speeds of AT&T’s 3G service, he said.

AT&T also reported an increase of 248,000 subscribers for its fiber-based U-verse television service. The company now has 2.1 million U-verse TV subscribers.

AT&T added 167,000 wireline broadband customers for the quarter. The company now has 17.3 million broadband subscribers, including wireless broadband customers.

Total wireline revenue, including traditional telephone service, declined 5.3 percent, from $17.1 billion to $16.2 billion.

For the full year, AT&T’s revenue was $123 billion, down from $124 billion in 2008. Net income for the year was down 2.6 percent from 2008, to $12.5 billion.