Wireless data boosts AT&T profits 30%

AT&T Inc., the nationÔÇÖs biggest telecommunications company, said second-quarter profits rose 30 percent due to increasing growth in the wireless business. ┬á Wireless data revenueÔÇömoney that subscribers pay to browse the Internet and have email access on their cell phonesÔÇörose 52 percent, and average income per user increased 3.5 percent. ┬á The company added 1.3 million wireless subscribers but lost 1.56 million wired phone lines.┬á Phone companies used to be protected from economic downturns because most customers considered their home phone service a necessity. But the increased growth in wireless business made up for the loss of home phone customers as 80 percent of Americans now own cell phones, making it easier to ditch their landlines for more attractive Internet and cable packages. ┬á The Dallas-based telephone carrier says its total revenue rose 4.7 percent to $30.9 billion, still under the $31.1 billion expectation polled by Thompson Reuters, and wire line earnings fell 2.4 percent, dropping revenue by 2.1 percent.┬á AT&T hopes the launch of the upgraded version of AppleÔÇÖs iPhone will boost third-quarter sales. As the sole US carrier of the iPhone, AT&T is counting on the device to win customers from competitors Verizon Wireless and Sprint Nextel Corp. ┬á AT&T is footing the subsidy bill to make the new iPhone available at $199, cutting into earnings by approximately 11 cents a share over the next year and half. ┬á To regain the lost money, AT&T is taking advantage of the fact that the average user of the iPhone spends more that $90 a month on Internet access, text messaging, and other wireless features, and that 40 percent of iPhone buyers are new AT&T customers.┬á