AT&T profit down as subsidies on iPhone hurting bottom line

AT&T profit down as subsidies on iPhone hurting bottom line

AT&T might have the star in its armor as they are the exclusive carrier of the Apple iPhone 3G in the US market.

But this is hurting their bottom line. The company is subsidizing the mobile phone heavily as they are aiming to generate the profits from providing services.

Sources say that the subsidies on the Apple iPhone cost the company nearly $900 million.

The company however reported a 15.4% growth in revenue. AT&T added that they activated 2.4 million Apple handsets in the most recent quarter.

Randall Stephenson, CEO of AT&T had this to say on their performance: “I am particularly pleased with the customer response to the iPhone 3G. The new customers we’re winning are high-value, with attractive revenue and churn profiles. We’re expanding the market, as users adopt more data and media-rich services and access a wide array of applications. These achievements are positive for the future of our business.”

AT&T CFO Rick Lindner had this to say: “I know some of you are concerned with the dilution we experienced this quarter with the new iPhone launch. But I believe our results will bear it out that it is an important investment in our future.”