AT&T registers decline in new iPhone contracts in Q1

AT&T, the largest U.S. telecommunications company, on Wednesday said the first quarter saw the addition of 62,000 net new subscribers on contract-based plans, a record low. In the same quarter a year ago, the figure was 512,000. In several previous quarters, the figure was above a million.

Subscribers on contract plans pay the most every month, so they're crucial to wireless companies. AT&T had an average quarter in terms of total new subscribers: 2 million. That number was bolstered by another Apple Inc. product, the iPad, as AT&T said it added 322,000 subscribers with tablet computers. But the bulk of the net additions, 1.3 million, came from non-phone, non-tablet devices like Amazon.com Inc.'s Kindle, security systems and GPS units. These generate little monthly revenue for AT&T.

AT&T said it activated 3.6 million iPhones, up from 2.7 million a year ago. But given the low number of net new contract subscribers, the new phones were clearly going to people who already had AT&T service. AT&T also said the percentage of iPhone subscribers canceling service was the same as last year, meaning Verizon Wireless doesn't seem to be pulling a lot of iPhone subscribers from AT&T.

Verizon Wireless started selling its version of the iPhone on Feb. 10, ending three and half years of exclusivity for AT&T. In most other countries where the iPhone is sold, there were already multiple carriers. Verizon Communications Inc., which controls Verizon Wireless through a 55 percent ownership stake, reports its first-quarter results Thursday morning.

AT&T's net income rose 39 percent to US$3.41 billion, or 57 cents per share, for the January-March period, up from US$2.45 billion, or 42 cents per share, a year ago.

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