Update: AT&T wireless subscribers hit 95.5M

Carrier reports best-ever subscriber gains, just before its iPhone exclusive deal ends

Because of differences in the way wireless carriers refer to wireless subscribers, an earlier version of this story incorrectly said AT&T had overtaken Verizon Wireless in the number subscribers.

AT&T reported Thursday it had 95.5 million wireless subscribers at the end of 2010.

The carrier said it added more than 2.8 million wireless subscribers in the fourth quarter of 2010, its biggest increase ever. It also had 8.9 million wireless subscriber additions for all of 2010, another record.

AT&T and Verizon Wireless are in a constant battle for subscribers, even though the market for smartphone users and users of other wireless devices is just about saturated.

The horse race for subscribers is likely to continue to heat up with the arrival of newer tablet computers along with the news that Verizon will start selling the iPhone 4 starting Feb. 10. In the third quarter, Verizon had 93.2 million wireless subscribers, ahead of AT&T's 92.8 million.

Verizon will offer the iPhone 4 on its CDMA/EV-DO network, and it expects to sell 11 million iPhones through the end of this year.

It's not clear how many new subscribers Verizon will gain from AT&T because it can now sell the iPhone, or whether Verizon's biggest gains with iPhones will come from elsewhere, including current Verizon customers moving up from less sophisticated phones.

The fallout AT&T suffers because of the loss of its exclusive iPhone deal could be 10% or more, analysts said. But that won't happen all at once, since customers might not move to Verizon until their two-year agreements with AT&T expire. In a recent ChangeWave survey of 4,000 U.S. consumers, 26% of iPhone users said that they would leave AT&T for Verizon, citing dropped calls and poor reception on AT&T's network.

AT&T is holding an earnings call with analysts later Thursday, and questions about the possibility of losing iPhone customers to Verizon are expected to come up.

AT&T also said its revenue reached $31.4 billion in the fourth quarter, up 2.1% over the fourth quarter in 2009, with wireless revenues growing 9.9% in the quarter. The carrier focused on non-iPhone device sales when touting its quarterly highlights, noting that its sales of iPads and Android-based tablets increased by 442,000.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His e-mail address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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