What was the primary driver of AT&T's revenue growth in the third quarter of 2007?

The primary driver of AT&T's revenue growth was the acquisition of BellSouth Corporation, which was completed on December 29, 2006. This acquisition led to the consolidation of BellSouth's and AT&T Mobility's financial results into AT&T's statements, significantly boosting total operating revenues.

How is the decline in voice revenues being addressed?

AT&T is addressing the decline in voice revenues by focusing on the growth of data services, including IP data and wireless data, which are experiencing strong demand. The company is also working to offset wireline access line losses by increasing non-access-line-related revenues from data, video, and wireless services, aiming to capture customers shifting to alternative providers like AT&T Mobility.

What is the status of the integration of BellSouth, and what are the associated costs or benefits?

The integration of BellSouth is a major focus, with AT&T reporting significant revenue growth as a result. The company is realizing merger synergies, though it also incurred merger-related charges and increased amortization expenses on intangible assets identified during the acquisition. The operational results of BellSouth are now fully included, contributing to both revenues and expenses. Management is actively working on integrating networks and operations to achieve cost savings and operational efficiencies.

What is AT&T's strategy for future growth in the wireless segment?

AT&T's wireless growth strategy centers on minimizing customer churn and increasing average revenue per user (ARPU), particularly through data services. The company is investing in network expansion, including 3G capabilities, and leveraging popular products like the iPhone. The acquisition of Dobson Communications is also expected to bolster its wireless footprint, especially in rural and suburban areas.

AT&T INC. 10-Q Quarterly Report Q3 FY2007

Summary

AT&T Inc. reported strong revenue growth in the third quarter and first nine months of 2007, driven significantly by the acquisition of BellSouth Corporation. Total operating revenues increased by 92.7% year-over-year for the quarter and 87.8% for the nine-month period, largely due to the consolidation of BellSouth and AT&T Mobility's results. While overall revenues saw substantial growth, the company continues to navigate the evolving telecommunications landscape. Voice revenues are declining due to increased competition and a shift towards alternative technologies like wireless and VoIP. However, this is being offset by robust growth in data services, particularly IP data and wireless data, reflecting increasing customer demand for these offerings. The company also highlighted strategic investments and acquisitions, including spectrum licenses and the purchase of Interwise, aimed at strengthening its competitive position in wireless and business services. Management expressed confidence in continued growth driven by data services, wireless expansion, and the integration of BellSouth, while acknowledging ongoing competitive pressures and regulatory considerations.

Key Highlights

1Significant revenue increase of 92.7% in Q3 2007 and 87.8% for the nine months ended September 30, 2007, largely attributed to the acquisition of BellSouth.
2Operating income saw substantial growth of 81.8% for the quarter and 93.4% for the nine months, reflecting the integration of acquired businesses.
3Wireless segment performance was strong, with customer additions and significant growth in data ARPU (up 47.8% year-over-year), driven partly by the introduction of the iPhone.
4Data revenues across segments continue to show robust growth, indicating a successful shift from traditional voice services.
5The company is actively managing its debt, with the debt ratio decreasing slightly to 35.3% at September 30, 2007, from 36.3% a year prior.
6Capital expenditures remain high, driven by network expansion, U-verse deployment, and integration projects, totaling $12.1 billion for the nine months.
7AT&T is strategically acquiring spectrum licenses, including a significant purchase in the 700 MHz band, to support future wireless growth.

AT&T INC. Quarterly Report for Q3 Ended Sep 30, 2007

Summary

Key Highlights

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