Verizon Gets the iPhone

The long awaited news finally came today, announced in a joint meeting with Apple in New York City. This will end AT&T’s three plus years of strong growth driven by its monopolistic hold on the iPhone.Verizon will start shipping to customers as early as February.

Many analysts expect AT&T to lose contract customers this quarter without a powerful, unique incentive to lure subscribers.The operator also suffers from a perception that its wireless network is ill-equipped to handle iPhone users' heavy data usage. AT&T could lose up to 3.5 million customers, although it will take time for that to happen due to contractual obligations. AT&T will also face additional pressures from Verizon Wireless, which may offer new iPhone customers the same privileges all of its smartphone customers enjoy: unlimited wireless data usage for a flat monthly fee.

Verizon will initially take a hit on its Earnings Per Share, due to the subsidy it will incur for the iPhone. However, in the long run it will profit greatly from the increased customer base. Overall, a great coup for Verizon.

C. Cohn
Cohn-Reilly Report

Telecom Earnings Update

AT&T earnings beat the Street by 4 cents -.54 actual earnings Per Share versus the expected .50.

- Revenues - $30.9 billion for the period. - Two million increase in total wireless subscribers - highest third-quarter net gain in the company's history. - 4.3 million postpaid 3G integrated wireless devices added to AT&T's network, the largest quarterly increase in the company's history; integrated device growth included 3.2 million iPhone activations. - 33.6 percent increase in wireless data revenues to $3.6 billion. - 240,000 net gain in AT&T U-verseSM TV subscribers — up from 232,000 added in the year-earlier third quarter — to reach 1.8 million in service. - 18.7 percent growth in wireline IP data revenues driven by AT&T U-verse expansion and growth in advanced business products. - $9.7 billion cash from operating activities in the third quarter and $25.5 billion year to date."

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C. Cohn
Cohn-Reilly Report / News Flash