AT&T Ups Forecast 2012 Smartphone Sales to 26 Million Units

AT&T is raising its expectations for full-year smartphone sales after what AT&T Mobility CEO Ralph de la Vega said has been a record-setting first two months of Q4. The carrier sold 6.4 million smartphones during October and November, already making Q4 AT&T’s second best quarter for smartphone sales; quarterly figures typically improve even more during December, de la Vega said Wednesday during an investor conference. The carrier now forecasts it will sell 26 million smartphones for the year, 1 million more than previously expected, de la Vega said. “Excitement is at an all-time high,” he said. “I feel very good about momentum going into December.” The growth in smartphone sales came as a result of an improved supply of Apple’s iPhones, as well as Android-powered models like the LG Optimus G and HTC One X, de la Vega said. The carrier is also “really excited” about the prospects for Windows Phone models like the HTC 8X and the Nokia Lumia 920, he said.

AT&T has also continued to see better-than-expected adoption of its “Mobile Share” data plans, de La Vega said. The carrier has signed up 5 million customers to the plans during the less than four months they have been available. AT&T began offering its plans in late August; No. 1 U.S. wireless carrier Verizon Wireless began offering its “Share Everything” shared data plans in June (CD Aug 23 p5) OR (WID Aug 23 p2). Average revenue per user from the AT&T plans is also higher than expected, de la Vega said. That comes in part because a higher-than-anticipated 25 percent of customers on the plans have opted to buy the highest tiers of data service -- 10 GB or more per month, he said. When Verizon Wireless began offering its shared data plans, it made them the only option available for new customers; AT&T offered its plans along with other plans, including an unlimited data option. Still, 15 percent of AT&T customers subscribing to the shared data plans were previously on the unlimited data plan, de la Vega said.

The better-than-expected adoption of shared data plans has also driven up sales of tablets, as has a recent AT&T $100 subsidy, de la Vega said. The rising interest also comes because of increased availability of tablets that operate on the two leading non-Apple iOS operating systems, Google’s Android and Microsoft’s Windows, he said. “I just can’t even fathom how many tablets will be under the Christmas tree,” de la Vega said.

AT&T continues to feel “very good” about its spectrum position, and will be in a good place particularly once the FCC approves its WCS spectrum deal, de la Vega said. Once the deal clears, it will give AT&T nearly 30 MHz nationwide on the WCS band. “That is huge for us,” he said. “It provides [for] all the short-term needs that we have. So I have never felt better about our spectrum position than I do today … we think once we get that deal done and behind us, we'll be in very good shape."

Pending deals involving Sprint Nextel and T-Mobile USA will not affect the fundamentals of the U.S. wireless market, de la Vega said. Sprint agreed to sell 70 percent ownership to Softbank for $20.1 billion, while Deutsche Telekom has proposed to merge T-Mobile and MetroPCS into a combined carrier. MetroPCS CEO Roger Linquist told investors Wednesday at the same conference that it remains focused on the T-Mobile offer but remains open to counteroffers (see separate report in this issue). Still, the Softbank deal will allow Sprint to become more competitive in the market, de la Vega said.