AT&T added another 2.7 million subscribers in the fourth quarter, with a 2009 total of 7.3 million bringing the carrier to 85.1 million subscribers in total.

“We had a solid 2009 and led the industry in the biggest growth driver — mobile broadband,” said Randall Stephenson, AT&T chairman and chief executive officer. “Looking ahead, customer demand for connectivity, particularly mobile broadband and IP data, continues to be strong, and AT&T is well positioned at the center of this growth. Our fundamental outlook for the business is quite positive.

“Our significant investments in IP infrastructure — both mobile and fixed — provide the next-generation growth platforms for us,” Stephenson said. “Our leadership in mobile broadband will continue to set us apart as we roll out even faster 3G speeds this year and begin deploying 4G capabilities in 2011. Our IP-based U-verse service continues to scale nicely, improving our consumer revenue profile. And we continue to see solid growth from mobile broadband and IP data services in the business segment.”

AT&T’s revenue for the quarter was actually down on the previous years coming in at $30.9 billion compared with $31.1 billion in the year-ago quarter.

AT&T and Apple currently offer an older 8GB iPhone 3G but this move would represent a complete departure from the iPhone 3G.

AT&T’s third-quarter integrated device growth included 3.2 million iPhone activations, also the company’s largest quarterly total to date, with nearly 40 percent of the activations for customers who were new to AT&T.

AT&T also reported that iPhoned accounted for 74% of total postpaid activations of “integrated devices” offering either a physical or virtual keyboard in addition to voice capabilities. 40% of iPhone activations were from customers who were new to AT&T.

AT&T received two million subscribers during the quarter, the highest third quarter in the carriers history.

The rollout will begin late on Friday morning, Pacific time.

MMS Update: We know you’ve been eager for this service so we wanted to offer a quick update on the launch plans for MMS on Friday, Sept. 25. Late morning, Pacific Time, on Friday, the new carrier settings update enabling MMS should be live and ready to download through iTunes. We’ll provide the steps and all of the details you need right here at that time.

Additional reports earlier this week suggest that AT&T is nervous about the launch of MMS having done some preliminary testing the carrier is said to have suffered strain on servers and infrastructure.

MMS will be enabled for iPhone 3G and 3GS owners on that day via a software update.

In the press release AT&T also makes mention that it is constantly striving to improve network capacity.

In Apple’s response the company said that it has not rejected the official Google Voice app but “continues to study it”. Apple’s main concerns lie with how the app contrasts with “the iPhone’s distinctive user experience” and “disables Apple’s Visual Voicemail.”

AT&T’s (below) response clearly states that the official iPhone carrier had no role in Apple’s consideration of Google Voice or related applications. The Apple and AT&T deal prohibits the operation of VoIP calls on AT&T’s network, but AT&T plans to “take a fresh look” at authorizing VoIP apps that run on 3G.

Google’s response is strange completely redacted as seen below.

ATT Response to FCC iPhone Letter 082109 as Filed

Google Response to FCC

To offer some background, Google Voice is a service originally known as Grand Central, at the most basic function Google Voice offers a single phone number of your choice that will ring multiple phones, e.g. work, home, mobile, etc. Along with this unified number there is also a unified voice mail system, accessible via the web. Google Voice also allows listening in on voice mails as they’re being left, setting custom away messages for different callers, blocking of telemarketers and many more features.

Several third party Google Voice apps had been available on the App Store for some months and Google had submitted the official app for review not long ago. The apps main functions are to facilitate dialling out of the phone using the Google Voice number, sending SMS messages, showing a call history and access to the online voicemail system.

On July 27 Apple rejected Google’s official iPhone app and removed all the previously approved apps from the App Store causing uproar amongst the media and iPhone owners. At the time it was unclear whether the decision was Apple’s or AT&T’s, it was later revealed that AT&T was most likely behind the ban.

Today it has been revealed that the U.S Federal Communications Commission has taken interest in the matter. In letters sent to Google, AT&T and Apple the FCC makes mention to an ongoing case started by Skype which questions wireless open access and also another case regarding handset exclusivity.

All the letters as well as the document containing details about RM-11361 can be seen below.

Petition to Confirm a Consumer’s Right to Use Internet Communications Software and Attach Devices to Wirele…

FCC letter to Apple

FCC Letter to AT&T

FCC Letter to Google

During the quarter AT&T activated 2.4 million iPhone subscribers, 34 percent of them were new to AT&T. According to AT&T’s figures this makes the iPhone responsible for more than 60 percent of carriers 1.4 million subscriber increase in the quarter.

The release of the iPhone 3GS dented AT&T’s bottom line slightly with the carrier subsiding each device by up to $400. ”Increased operating expenses in the second quarter of 2009, in part, reflect volume-based acquisition costs associated with the success of the iPhone 3GS launch,” read AT&T’s report, ”AT&T’s iPhone customer characteristics are attractive, with ARPUs significantly higher than and churn rates well below the company’s postpaid averages; as a result, robust iPhone demand drives strong recurring revenues and substantial long-term value.”

In related news AT&T CEO Randal Stephenson said during the Fortune: Brainstorm tech conference that, “There will be a day when [we] are not exclusive with the iPhone”. Stephenson failed to comment on Apple and AT&Ts relationship.

1. Fact of the Week: On June 25, the day Michael Jackson died, text messages sent on our network spiked at 65,000 messages per second — the largest volume ever recorded — surpassing events like American Idol voting and New Year’s Eve, when millions of our customers wish their friends and family a happy new year via text.”

2. “iLaunch day 2009 was one for the record books, as AT∓T customers scrambled to get their hands on the fastest, most powerful iPhone yet.

Here’s a look at some of the milestones we achieved:

* Best-ever sales day in our retail stores
* Second-largest traffic day in our retail stores
* Most transactions processed via our IT systems in a single day
* Most upgrade eligibility checks in a single day
* Largest order day in att.com history
* Largest features sales day in att.com history

On this year’s launch day, iPhone sales exceeded sales recorded on 2008’s iPhone launch day, Black Friday 2008 and Dec. 26, 2008 — all heavy-volume sales days. In fact, this year we surpassed 2008’s launch day sales at about noon Central time, and sustained our previous peak hour record, also set in 2008, for 11 straight hours.

All AT&T stores will open at 7 a.m. local time to serve pre-order customers but be sure to check your confirmation email as some units are not due to arrive until after June 19. Anyone who hasn’t pre-ordered can turn up during normal business hours and will be served on a “first come, first served” basis.

Customers new to AT&T who wish to transfer their current number to AT&T should bring a copy of a bill from their current carrier. Customers will be asked to provide account information as it appears on record with their current provider, including:

• Account number
• Name of the account holder
• Account holder’s Social Security Number or Tax ID
• Billing address
• PIN or password (if applicable)

AT&T will initially only sell one iPhone 3GS to every new customer.

All of that said, we’ve been listening to our customers. And since many of our iPhone 3G customers are early adopters and literally weeks shy of being upgrade eligible due to iPhone 3GS launching 11 months after iPhone 3G, we’re extending the window of upgrade eligibility for a limited time.

We’re now pleased to offer our iPhone 3G customers who are upgrade eligible in July, August or September 2009 our best upgrade pricing, beginning Thursday, June 18.

If you’re one of the many customers who will benefit from this change, please note that our upgrade eligibility tools will reflect this change on Thursday, June 18.

Those who are now eligible for AT&T’s lowest upgrade pricing will be able to purchase an iPhone 3GS for $199 (16 GB) or $299 (32 GB).

Customers who are now eligible but had already pre-ordered an iPhone will receive a credit for the price difference.

The comments come direct from AT&T’s CEO, Ralph de la Vega who said at the Reuters Global Technology Summit last week that he could see AT&T capping data in return for lower costs.

“Right now we continue to study what is the best thing that is available, not just from an iPhone point of view, but what you can do to stimulate additional demand,” de la Vega said at the Technology Summit.

The remarks come not long after reports that AT&T is looking into offering a $20 per month iPhone plan that would give iPhone owners $10 a month in savings but see a data cap put in place.

The $10 price drop would bring the price of the tariff down from $69 to $59, a saving of $120/year. The move is said to be announced at next months Worldwide Developers Conference where Apple is expected to unveil a new iPhone.

Commenting on the current price of an iPhone over a two-year contract, Cotes said:

“This price does not address the whole market,” says Cote. And the price barrier has started to be a concern for Apple. For example, says Cote, “Wal-Mart iPhone sales haven’t met expectations.”

The company which also reported a “1.2 million net gain in total wireless subscribers to reach 78.2 million” said that of the 1.6 million iPhone 3G activations 40-percent of those customers were new to the company.

Randall Stephenson, AT&T chairman and chief executive officer said in a statement; “I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook. Business and consumer expectations for mobility are on the rise, wireless innovation is flourishing and the opportunities ahead are substantial. AT&T is strongly positioned to lead in the next generation of wireless growth.”

Apple will announce its fiscal second quarter 2009 results later on today.

The report states that AT&T is making tweaks to its current HSPA network which will bring the capacity up to 7.2Mbps.

AT&T is increasing the downlink capacity on its high-speed packet access (HSPA) from 3.6 megabits per second to 7.2 Mb/s through software upgrades at the base station, said Scott McElroy, AT&T Mobility vice president of technology realization.

The report goes onto add that AT&T will be looking to implement HSPA+ which will be capable of speeds up to 21Mbps.

Spokesman Michael Coe said AT&T will sell the phones starting next Thursday for $599 or $699, depending on the storage capacity. The two models cost $199 or $299 under contract.

The phone company had said in July, when the latest version of the iPhone was launched, that it would sell contract-free phones in the United States. Such phones are sold in some other countries.

The new phones will still be “locked” to AT&T and won’t work with any other cellular carrier unless they’re modified. AT&T will only activate them on the regular iPhone plans, which include a $30 monthly charge for data access. Prepaid service will not be available.

The training materials go on to explain that customers purchasing no-commit iPhones will be limited to one purchase.

AT&Ts CEO Randall Stephenson attributed iPhone sales as reason why AT&T fought the economy to report revenues up 2.4% (to $31.1 billion).

“The success of our iPhone 3G launch has driven wireless growth and helped redefine the wireless data space.”

Fortune offers some analysis of Apple’s deal with AT&T and in particular what has caused such growth for AT&T in 2008.

AT&T has activated 4.3 million iPhone 3Gs since its launch, 1.9 million in Q4 alone — more than double its iPhone activations one year earlier.
The average revenue from Phone users is 60% higher than the typical AT&T customer — thanks to that $30 per month data fee. Their heavy use of Web services helped drive AT&T wireless data use up 51.2% year to year, which as reader Jon in Brentwood, Calif., points out is not necessarily a good thing.
About 40% of the iPhone activations this quarter were new AT&T customers, either buying their first cellphone or switching from another carrier.
The churn rate — the percentage of customers who drop AT&T’s service — among iPhone owners is significantly lower than the rest of the network, sharply reducing marketing costs.

AT&T has already begun offering such deals and over Christmas began selling a notebook in association with Acer for just $99.

When speaking to Fortune AT&T’s Glenn Lurie said that he “would very much like to do more business with Apple.”

AppleInsider is also noting that an iPhone 3G owner had sent an email to Steve Jobs in the past calling it “ludicrous” that “such an advanced device” can’t tether with a computer.

Jobs reportedly wrote back saying, “We agree, and are discussing it with AT&T.”

- Activate Wi-Fi from the settings icon on your iPhone
- Select “attwifi” from the list of available networks
- Enter your 10-digit mobile number and check the box to agree to the Acceptable Use Policy. Tap ‘continue’
- You will receive a text message from AT&T with a secure link to the AT&T Wi-Fi hotspot. You will not be charged for the text message.
- The SMS link will only be valid for 24 hours at the location it was requested. Another request must be submitted when using another hotspot location.
- Open the text message and tap on the link for 24-hour access to the AT&T Wi-Fi hotspot

The US iPhone carrier reported a 5.5 percent rise in profits to $3.23 billion and EPS of $0.55. AT&T also noted that it gained an added 2 million subscribers to its network to end the quarter with 74.9 million.

Growth was driven by the activation of 2.4 million iPhone 3Gs, 40 percent of which were new to the network.

“I am particularly pleased with the customer response to the iPhone 3G,” said AT&T CEO Randall Stephenson. “The new customers we’re winning are high-value, with attractive revenue and churn profiles.”

Apple announced on Tuesday that it had sold 6.9 million iPhones worldwide in its previous fiscal quarter.

The email from Jobs read:

We agree, and are discussing it with ATT.

Sent from my iPhone

The newspaper cites reported from iPhones users who state that they are experiencing issues with calls being dropped. The newspaper goes onto speculate that this could be an hardware issue with the Infineon chip used within the iPhone; a possibility that Infineon itself has stated as unlikely.

The article explains that the iPhone 2.0.2 update released yesterday aims to fix the reported issues by addressing how quickly the iPhone 3G will drop a weak 3G signal and begin using a stronger EDGE signal. Often resulting in dropped calls and frustrated users.

Apple spokeswoman Jennifer Bowcock said on Tuesday, “The software update improves communication with 3G networks.”

The information was disclosed by AT&T during its fiscal second quarter results in which company profits rose 30-percent to $3.77 billion (63 cents per share) on revenue of $30.9 billion for the three months ended June 30.

“The Apple iPhone 3G is a dramatic example of this transformation,” said chief executive Randall Stephenson. “In the days following our exclusive U.S. launch of this new device, powered by the nation’s fastest 3G wireless network, customer response has been everything we had anticipated and more.”

The first cracks began appearing when the iPhone was set to launch in the UK, as customers queued through the early hours of the morning they were quickly disappointed as stocks dwindled at O2, Carphone Warehouse and Apple Stores across the country. Most O2 stores reporting that they had less than 50 units.

These issues and frustrations were nothing compared to what would occur as US purchasers began hammering the iTunes activation servers. Not long after the 8AM launch of the iPhone 3G on the East Coast Apple’s servers began slowing and eventually died leaving thousands queuing across the country.

Reports emerged that some were being sent home with un-activated units, instead being told to activate them at home through iTunes.

The problem was increased by magnitude as Apple simultaneously released the iPhone and iPod touch 2.0 firmware update causing a flurry of users to attempt to download the software.

As servers failed many iPhone owners in AT&T and Apple stores were left with half “bricked” iPhones and users at home trying to update were also suffering with non-functional units.

The problems come after a significant delay in the release of MobileMe which took over 24 hours to fully come online and is reportedly still sluggish.

The iPhone 3G will go on sale at 8am in AT&T stores across the US on July 11.

AT&T offers a video for existing customers in which the company outlines that current iPhone owners backup their iPhone using iTunes prior to purchasing an iPhone 3G. The video also notes that voicemail will be deleted when upgrading.

In a second video AT&T advises those wishing to sing-up with AT&T for the first time to visit a store before July 11th and complete a credit check to save time on launch day.

AT&T also confirmed that the 8GB and 16GB iPhone’s will sell for $199 and $299 respectively, prices require two-year contracts and are available to customers who purchased before July 11, customers activating a new line with AT&T and current AT&T customers who are eligible, at the time of purchase, for an upgrade discount.

The iPhone 3G will cost $599 and $699 to customers wishing to opt out of any form of contract and will be sold sometime “in the future,” AT&T said.

iPhones will go on sale at 8 a.m. local time on July 11.

The analyst also adds that AT&T is paying Apple an added $100 for each new subscriber to AT&T signed up through Apple’s brick-and-mortar stores.

The subsidy on the iPhone is said to be more than 50-percent higher than most other smart phones which are typically subsidised by around $200.

Today Apple and AT&T have agreed to license its “visual voicemail” technology and settled a lawsuit against them. No companies involved revealed the financial details of the agreement.

“The patent litigation with Apple has been settled. The patents have been licensed to Apple,” company founder Judah Klausner.

According to supporting materials AT&T will be discussing:

• Strategy
• Qs and As

AT&T will focus on the following four aspects of iPhone 3G when selling the device:

• More powerful device – innovative features and functionality
• Greater speeds – delivered via AT&T’s 3G network
• New agreement – replaces revenue sharing with traditional model that supports a significantly lower device price point
• Opportunity to expand the market – and spur increased demand for wireless data services

AT&T also lists “GPS-enabled YellowPages.com mobile application” as a feature of the new iPhone.

Finally AT&T confirms that two monthly data plan options will be available:

• Consumer individual unlimited data and e-mail – $30
• Enterprise unlimited data and corporate e-mail – $45

In June of 2007 AT&T hired many short-term workers for what turned into crowd control for the release of the iPhone on June 29th.

Temporary workers will begin work on June 16th and end three months later on August 16th, those who remember from last year will note that the temps started one week before the iPhone release to receive the necessary training.

AT&T said Wednesday that it plans to complete deployment of its 3G network by next month.

“By the end of June, connecting to AT&T’s 3G mobile broadband service will be as speedy as logging onto the high speed Internet service that many consumers enjoy at home,” the carrier said in a statement.

The carrier which is the exclusive distributor of the iPhone in the US noted that the final step in the deployment of its 3G network was to setup High Speed Uplink Packet Access (HSUPA) technology in six remaining markets covered by its 3G network, which will boost uploads speeds to the 500 – 800 Kbps range.

“The ability to quickly upload large files from a laptop is no longer a luxury — it’s a necessity,” said Kris Rinne, senior vice president of Architecture and Planning for AT&T’s wireless operations. “By fully deploying HSUPA across our 3G footprint, we not only meet the current needs of our customers but also lay the path for our continued evolution to even faster wireless broadband capabilities.”

The company’s HSPA network is the best-positioned among American carriers to grow in line with customer demand, evolving to HSPA+ and providing next-generation speeds without costly investments. AT&T plans to adopt LTE (Long Term Evolution) technology to reach even higher speeds in the long term.

Apple is widely expected to release the next revision of the iPhone in June, it is also predicted that the iPhone will run on 3G technologies taking advantage of AT&T’s continued deployment across the USA.

Offers Refurb iPhones for Discount

AT&T is currently selling refurbished iPhones on its online store.

The 16GB iPhone is selling for just $349 while the 8GB model is selling for only $249.

AppleInsider has republished an internal AT&T memo which informs retail staff that customers can only purchase one iPhone.

“Effective May 14, 2008, customers can only purchase one iPhone at AT&T stores,” reads a copy of the memo. “The prior limit of three iPhones is no longer in effect.”

AT&T also informs retail staff that customers can only purchase using credit or debit cards.

T-Mobile Germany Shifts 100,000 iPhones

CEO of Deutsche Telekon, Rene Obermann announced today that its subsidiary T-Mobile has sold over 100,000 iPhones in Germany.

T-Mobile board member Hamid Akhavan cited that iPhone sales were “about in line” with corporate sales targets.

Recent price cuts of the iPhone in Germany were said to have increased sales.

AppleInsider is reporting that AT&T is now listing a new iPhone model on its website.

The option to select “iPhone Black” is visible alongside the normal “iPhone” for existing AT&T customers who are logged into their AT&T account.

The apparent error adds credence to rumours that the next-generation iPhone will have a black plastic shell.

Boy Genius Report is today noting that another AT&T memo informs employees that vacation will be limited between June 15 and July 12.

The internal memo as follows:

To: All Employees

If customer traffic is manageable, there may be an opportunity to approve vacation toward the end of the period. Managers will communicate updates as they become available.

This comment was reportedly followed up with a question from Sascha Segan from PC Mag asking whether that sweeping statement included the iPhone, the CEO repeated, “Let me repeat what I said: I think that you’re going to see our integrated devices be 3G devices in the not-too-distant future, and I mean months. That should be clear enough.”

After the expansion AT&T will be serving 3G services to over 350 cities across the U.S. including all of the top 100 U.S. cities.

The 3G initiative will include the roll out of more than 1,500 additional cell sites nation wide.

Apple and AT&T have both spoke of the 3G iPhone which is likely to see its release in 2008.

“You’ll have it next year,” he said, explaining that he was unaware of how much more the new version will cost than the existing $399 model because Apple chief executive Steve Jobs “will dictate what the price of the phone is.”

The new model which is widely expected since Jobs himself has mentioned that Apple is working on it should please those who have discounted the current model due to its EDGE connection which uses existing 2.5G GSM technologies. 3G coverage across America and many parts of Europe is still as patchy as EDGE coverage.