AT&T Inc T
Q4 2011 Earnings Call Transcript

Transcript Call Date 01/26/2012

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the AT&T Fourth Quarter 2011 Earnings Release. For the conference, all the participants are in a listen-only mode. There will be an opportunity for your questions. Instructions will be given at that time. As a reminder, today's call is being recorded.

With being said, I will turn the conference now to Brooks McCorcle. Please, go ahead.

Brooks McCorcle - IR: Thanks, John. Good morning, everyone. Welcome to our fourth quarter conference call. It's really great to have you with us this morning.

As John mentioned, this is Brooks McCorcle, Head of Investor Relations for AT&T, and on the call joining me this morning are Randall Stephenson, AT&T's Chairman and Chief Executive Officer; and John Stephens, AT&T's Chief Financial Officer. Randall will provide opening comments, then John will cover our results, and then we'll follow with Qs and As.

Let me remind you that our earnings material is available on the Investor Relations page of the AT&T website. As a reminder, that is

I also need to reference our Safe Harbor statement, which is on Slide 3, and that says that this presentation and comments may contain forward-looking statements. They are subject to risks and details are in our SEC filing and on AT&T's website.

With that I will now turn the call over to AT&T's Chairman and Chief Executive Officer, Randall Stephenson.

Randall L. Stephenson - Chairman, CEO and President: Thanks, Brooks. Morning everybody. I'll start with just a couple of brief comments on 2011, then what I want to do is just move into our plans and outlook for 2012.

2011 was obviously an eventful year, not only for us, but the entire industry, and what I hope didn't get lost in all of the news cycles on mergers and iPhones is what AT&T accomplished during the course of the year, and really how that positioned us for 2012. We came out of 2011 with each of our key growth platforms – mobile broadband, strategic business services, and U-verse – all growing at strong double digits. I mean, it's better than three-fourths of our total revenues now come from wireless, data, and managed services, and those have a combined growth rate above 7%.

We had really strong mobile sales throughout the year. In fact, we had a blow out holiday season, and in the fourth quarter, we sold 9.4 million smartphones. That's 50% above our previous record. In the year, when our competitors began selling the iPhone, e outsold them in every single quarter. We also led all competitors in total wireless substantial added, 7.7 million, for the year, and we're number one in just about every key mobile broadband growth metric, smartphones, emerging devices, postpaid data ARPU, and customers on tiered pricing plans.

When you look at the network side of the equation, this was for us an unprecedented year. We challenged our network team to push call retainability on our 3G network above 99% by year-end, and we've now hit or beat that three months running. We closed the year with 80% of our total mobile data traffic on Ethernet backhaul, and that's well ahead of our original plan, and we're pleased to have that deployment behind us because we believe we now have the most robust backhaul infrastructure in the industry. This is a backhaul infrastructure that is built for data.

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