AT&T, the largest mobile cell phone company in the United States, reported a rise in quarterly profit on Tuesday, led by strong growth in its wireless business, as traditional phone subscriptions fell.
AT&T’s first-quarter profit rose to $3.46 billion, or 57 cents a share, from $2.85 billion, or 45 cents a share, in the same quarter a year earlier.
Stifel Nicolaus analyst Christopher King said he had expected stronger results from AT&T’s wireless business.
“Overall, I think it was largely in line, but not a great quarter — And wireless net adds were less than expected,” he said.
AT&T, the exclusive U.S. carrier for Apple’s iPhone, said it added 1.3 million net wireless subscribers in the quarter, in line with an average estimate of 1.32 million according to seven analysts.
King had forecast 1.4 million new subscribers. He also pointed out that net additions of postpaid users, or those who pay monthly subscriptions instead of prepaid fees, rose by 705,000 subscribers, just 3.7% higher than in the year-ago quarter.
Postpaid subscribers are considered more valuable as they tend to bring in more revenue per user. Analysts have said an increase in consumers with credit concerns may be forcing more first-time subscribers to sign up for prepaid services.
The company has been banking on mobile phones for growth as traditional home phone users decline. Primary retail consumer access lines fell 6.2% year-on-year.
It is also selling high-speed Internet and video services to retain customers and compete with cable service providers. The company said high-speed Internet connections among its consumer and business customers rose 13.9% from a year earlier to 14.6 million.