AT&T Expects Tablet Boost in Q4

AT&T Inc. (NYSE: T) believes tablets will boost its fourth quarter as it looks ahead to the Apple Inc. (Nasdaq: AAPL) iPad Mini along with new Windows and Amazon.com Inc. (Nasdaq: AMZN) devices.

"We anticipate a higher number of net adds from tablets in the fourth quarter," AT&T Mobility CEO Ralph de la Vega said on the operator's third-quarter earnings call Wednesday.

"We'll have a full lineup of tablets," the CEO said, later referencing support for Apple and Android devices, as well Windows 8, AsusTek Computer Inc. and Samsung Corp. tablets, and exclusive launches of the Amazon Kindle Fire HD 4G LTE. (See Deciding On a 4G Operator for Your iPad Mini, Apple Adds 4G LTE Flavors as It Shrinks iPad, Amazon Lights Up AT&T's LTE in New Kindle Fire and Microsoft Surface Poll: Price Trumps LTE .)

Smartphone and data drivers
The third quarter, however, was all about smartphones for AT&T. It said it sold 6.1 million of them, up from 1.3 million from a year ago.

The company said it activated 4.7 million iPhones over the quarter, with 18 percent of the buyers new to AT&T. AT&T did not exactly split out how many were new iPhone 5s, noting that it only had them for 10 days during the third quarter and faced supply shortages.

"Our iPhone 5 sales were about twice that of our closest rival," claimed de la Vega. Verizon sold about 650,000 of the new iPhones, which support 4G LTE. (See Verizon Sells 4.5M 4G LTE Devices in Q3.)

Overall, Verizon beat AT&T on smartphone sales for the quarter, however, selling 6.8 million of the devices. Big Red sold many LTE-enabled Androids during the third quarter.

Still, AT&T's smartphone sales are nothing to sniff at, helping to drive data revenues for the quarter. Wireless data revenues were up 18 percent, at $6.6 billion for the quarter.

Ahead of schedule on LTE
AT&T now has 77 markets up and running on 4G Long Term Evolution (LTE). The company says that means that it is now reaching more than 135 million potential customers and hopes to double that number by year's end.

"I am thrilled by the performance of our network," said de la Vega of the LTE deployment. He said that the company was looking at download performance averages of 5 Mbit/s to 12 Mbit/s, "but it's much higher in many places."

The CEO said that AT&T could look at using the technology as a replacement for some wired broadband in the future.

The numbers
AT&T reported third-quarter net income of $3.64 billion, or $0.63 per share, compared with $3.62 billion, or $0.61 cents per share, in the same period a year ago. Excluding special items, the adjusted profit was $0.62 per share.

Revenue was flat from last year at $31.46 billion.

Analysts polled by Thomson Reuters had expected an EPS of $0.60.

— Dan Jones, Site Editor, Light Reading Mobile

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