AT&T reported a decline in revenue that was below market expectations, but added more wireless subscribers than expected, driven by sales of tablet computers with cellular connections.
The No. 2 U.S. mobile service added 296,000 subscribers in the quarter, above expectations of just over 195,000, according to six analysts contacted by Reuters.
This included a net addition of 365,000 subscribers using tablet computers, implying a net loss of 69,000 higher-value phone subscribers. As a result Nomura analyst Michael McCormack said that AT&T's 0.9-percent growth in average monthly revenue per user (ARPU) missed his expectation for 1.9-percent growth.
"The concern's going to be how we should be thinking about ARPU going forward," said McCormack who expects a revenue growth slowdown across the industry as most consumers already have smartphones so operators have to look for growth elsewhere.