iPhone sales, LTE plans dominate U.S. operators' Q3 results


As we close out the third-quarter 2011 reporting season, it's clear that Apple's (NASDAQ:AAPL) iPhone continued to play an integral role in the top U.S. wireless operators' quarterly metrics. And with Sprint Nextel's (NYSE:S) recent agreement with Apple to sell the iPhone 4 and iPhone 4S (as well as regional operator C Spire), the competition among U.S. operators for lucrative iPhone subscribers will likely intensify in fourth quarter.

But in the third quarter AT&T Mobility (NYSE:T) racked up the most iPhone subscribers, activating 2.7 million iPhones in the quarter, compared to Verizon Wireless (NYSE:VZ), which activated 2 million iPhone customers. Both companies noted that iPhone sales were slower in the third quarter compared to the second quarter, which they attributed to the fact that the iPhone 4S launch occurred in the fourth quarter and many subscribers were waiting for that device.

Sprint, of course, didn't start selling the iPhone until the fourth quarter, so it was not included in the mix. However, the company did say it expects to sell more than 1 million iPhones in the fourth quarter.

T-Mobile USA, which is the only Tier 1 operator in the U.S. that doesn't sell the iPhone, added 126,000 net wireless customers in the third quarter, but noted that the launch of Apple's iPhone 4S by the other Tier 1 carriers could contribute to future postpaid churn.  AT&T announced in March that it was planning to acquire T-Mobile USA for $39 billion however the deal is being hindered by a Department of Justice lawsuit to block the acquisition on antitrust grounds. A trial on that lawsuit is scheduled to begin Feb. 13.

Beyond the iPhone, the other big news from the operators' earnings reports was their progress on LTE.  Verizon dominates the LTE front with commercial service in 165 markets and 186 million POPs and plans to cover 175 markets by Nov. 17. The company also said it sold 1.4 million LTE devices.

AT&T, meanwhile, launched LTE in five cities in third quarter and is on track to launch 15 cities and cover 70 million POPs by year-end.

Sprint Nextel announced earlier in the quarter that it will deploy LTE in its 1900 MHz spectrum and launch commercial service in the middle of 2012. The company also said it will work together with Clearwire (NASDAQ:CLWR) on technical specifications for the LTE network to ensure seamless handoffs between Sprint and Clearwire.

For a complete analysis of the wireless carriers in the third quarter, be sure to check out FierceWireless' special report on the top U.S. wireless carriers in the third quarter of 2011 based on subscribers. The figures are from Strategy Analytics and include major metrics such as churn, ARPU and revenue of each carrier.  Check out the special report here. --Sue

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