There is much to look forward to from wireless operator earnings reports in the second quarter, including how well connected devices such as tablets and ereaders continue to do, as well as whether Sprint Nextel (NYSE:S) will reveal new network-hosting deals with LightSquared and possibly Clearwire (NASDAQ:CLWR).
AT&T Mobility (NYSE:T) is the first of the carriers to report earnings July 21, and the focus will be on how well it has continued to weather Verizon Wireless' (NYSE:VZ) launch of Apple's (NASDAQ:AAPL) iPhone 4. AT&T survived the first quarter relatively unscathed with 3.6 million iPhone activations and 2 million net subscriber additions. According to analysts surveyed by Dow Jones Newswires, AT&T is expected to report revenue of $31.3 billion, up slightly from revenue of $30.8 billion in the year-ago period.
However, analysts also will look to AT&T's connected device activations, since such devices are forecast to be a major growth driver for all carriers in the years ahead. AT&T has taken a lead on the connected devices front, the company added 1.3 million connected devices in the first quarter.
Verizon reports earnings July 22, and analysts likely will focus on how many iPhones the company activated in the second quarter to see if it keeps pace with the 2.2 million iPhones it activated in the first quarter. Analysts also will be gauging how well Verizon's LTE smartphones are doing in the market, since Verizon added the Samsung Droid Charge and the LG Revolution to the mix during the second quarter. Verizon activated 500,000 LTE devices in the first quarter, including 260,000 HTC ThunderBolt smartphones. According to Dow Jones, Verizon is expected to report revenue of $27.4 billion, up from $26.8 billion a year ago.
Meanwhile, all eyes will be on Sprint to see if the company announces details of any new network-hosting arrangements as part of its Network Vision network modernization plan. Sprint will confirm a LightSquared LTE deal when it announces it second-quarter earnings on July 28, according to a report earlier this week in CNET. Sprint has also indicated it might be interested in a similar deal with Clearwire; Sprint currently resells Clearwire's mobile WiMAX service.
Network-hosting deals could give Sprint a significant source of new revenues in the coming years. And that cash could help the carrier defray the costs of Network Vision, which will cost $4 billion to $5 billion over the next three to five years and give the carrier the ability to support LTE via new, multi-mode base stations.
Analysts expect Sprint to post a net loss on revenue of $8.3 billion, up from $8 billion in the year-ago quarter.
- see this Dow Jones Newswires article (sub. req.)
- see this FierceWireless Q2 earnings page
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