AT&T Q4 2011 wireline growth driven by ongoing video, broadband gains
AT&T's (NYSE: T) wireline division in Q4 2011 was once again buoyed by gains in its U-verse broadband and video services and IP-based business services. The service provider reported that the fourth quarter was the second consecutive quarter of sequential wireline business revenue growth, a 44 percent increase in U-verse revenues and solid cost management.
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Wireline consumer and business services both saw gains in Q4 2011.
In the consumer segment, the continued adoption of IP-based data services helped drive up residential service revenue to $5.4 billion, up 0.5 percent over Q4 2010. This was the sixth quarter of year-over-year growth.
Driven by U-verse broadband and TV services, consumer wireline revenue per household rose 7 percent over Q4 2010 and 2.3 percent sequentially.
Likewise, IP-based data services were a key driver in the business segment. During the quarter, next-gen service revenue, including Ethernet, VPN, hosting and IP conferencing services, grew 16.4 percent since Q4 2010.
Here's a breakdown of key wireline metrics:
Consumer wireline Voice: As expected, AT&T reported that consumer revenue connections dropped due to ongoing declines in traditional voice access lines. At the end of Q4 2011, AT&T had 41.3 million consumer revenue connections, down from the 43.4 million it had at the end of the fourth quarter of 2010 and 41.9 million at the end of Q3 of 2011. These landline losses were slightly offset by increases in U-verse TV and VoIP services. In Q4 2011, the telco added 136,000 new U-verse voice connections and 598,000 over the past four quarters.
Broadband and video: During the quarter, the service provider added 208,000 AT&T U-verse TV and 587,000 U-Verse Internet customers, but posted a net loss of 49,000 broadband customers due to users in non U-verse markets adopting faster cable modem connections. However, it continues to make gains with U-verse, passing over 30 million living units. At the end of the quarter AT&T had a total of 5.6 million video subscribers, a figure that consists of both U-verse and bundled satellite customers.
Business services: AT&T's bet on Ethernet, VPN and other IP-based services paid off in Q4 as total business revenues grew sequentially for the second consecutive quarter. Although business revenues of $9.3 billion were down 1.4 percent from Q4 2010, they were slightly ahead of Q3 2011. The service provider attributes the year-over-year decline to economic conditions and weakness in voice and legacy data products, which was somewhat offset by IP data growth.
From an overall revenue standpoint, AT&T reported that consolidated revenues for the quarter ended Dec. 31, 2011, totaled $32.5 billion, up $1.1 billion, or 3.6 percent over the same quarter in 2010.
Looking forward towards 2012, the service provider said it expects consolidated revenue growth of 2 percent for the year and keeping wireline margins stable.
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