AT&T’s CFO Rick Lindner wrapped-up Morgan Stanley’s Annual Communications Conference today and revealed a couple of interesting internal tidbits. Although some rumors are afoot that the highly anticipated Apple iPhone launch will be delayed past its scheduled late-June time frame, Lindner said that Apple has confirmed the availability of the device for June.
Lindner also said that research has shown that 60% of the iPhone buyers will come to AT&T’s wireless services from other carriers. Assuming that the one million folks who have expressed interest in buying the iPhone at AT&T’s website reflect more or less the right number of consumers who will buy the iPhone this year, other wireless carriers (Verizon Wireless, T-Mobile, Sprint-Nextel and so forth) can expect to lose around 600,000 customers as a result of AT&T’s exclusive pact with Apple.
Lindner did warn that “early on, supplies will be tight” as pent-up demand depletes iPhone inventories following launch. But still, “I do think we’ll have enough units in our distribution and enough units in Apple’s distribution to make a very good launch,” he said.
Cell service made available through the iPhone will cost about the same as AT&T’s regular service. The “pricing point is very similar to the rate plans we have today with a nice data package add-on to this service,” Lindner said.
AT&T’s other high-profile product, U-verse TV service, “is stronger than it’s ever been.” But, costs are higher than the company had projected too. Although AT&T originally pegged the capital costs of building out the fiber-to-the-node infrastructure at $4 billion to $6 billion, the telco later pinpointed the total costs to come in at $5 billion.
But, as the company has gained more experience in the build-out, it’s clear that $5 billion won’t do. Costs are now expected to fall closer to $6 billion.
Lindner said that AT&T’s decision to deploy more high-definition TV services entails far higher server costs than originally expected. Moreover, the costs of conditioning the copper loops for video service has been greater than anticipated, although the telco would have had to recondition some of these lines as part of its ongoing maintenance anyway. So, the U-verse build has had some effect in lowering overall loop rehabilitation costs that AT&T routinely incurs as part of ordinary maintenance.
Cynthia Brumfield at 3:01 PM|Comments(0)
Blogs We Read
