AT&T's Earnings Report: What, Us Worry?
When life gives you lemons, make lemonade. And what if those lemons turn out to be rotten? Smile, keep pouring, and hope nobody notices.
That's what AT&T tried to do when its Q1 earnings report came out today. Predictably, it didn't work. Journalists immediately noticed that the company's net wireless subscriber growth during the quarter took a nose dive -- and it wasn't hard to figure out why.
A year ago, AT&T had a net gain of 512,000 wireless subscribers. Last quarter, that number dropped to just 62,000. Take away subscribers using non-phone wireless devices, and you end up with a net gain of around 4,000 users.
Is it a coincidence that Verizon started selling the iPhone at the beginning of the year? Of course not.
An AT&T spokesperson had the unenviable task of putting the best possible spin on this disaster. Unfortunately, the best they could come up with was a bizarre claim that the results proved the competitive threat from Verizon to be "way overblown."
That's a hoot. Verizon descends like a locust swarm on one of AT&T's iPhone business, and everything is just dandy, thanks.
But the real fun may just be starting for AT&T. As its customers' contracts expire, the company will have to sell them on staying put rather than jumping ship to Verizon. I think that's going to be an uphill battle, although we'll find out for sure soon enough.
In the meantime, you don't have to wonder why AT&T is so eager to close its deal to acquire T-Mobile. If this is a hint of things to come, the company will probably agree to all sorts of compromises to get the deal past anti-trust regulators.
