Wireless growth continues for telecoms giant AT&T in the second quarter with subscriber gains, increased wireless data revenues and improved margins.

AT&T Wireless can now boast a 15.8 percent overall increase of revenue for the second quarter. Sales grew to $12 billion and wireless service revenues grew 14.8 percent to $11 billion, excluding handset and accessory sales.

"We had a solid net add quarter with 1.3 million," said Rolf M. Gatlin, spokesperson for AT&T, Dallas, Texas. "We delivered a high percentage of retail postpaid net adds, which were up more than 26 percent from the first quarter this year.

"That's with lower sales of the 2G iPhone in the several weeks leading up to the iPhone 3G launch," he said. "We continue to have very strong gross add flow share, with total gross adds of 4.9 million and postpaid gross adds also strong at 2.8 million."

This jump in growth can be attributed to solid subscriber gains, an increase in smartphone purchases and integrated devices. This fueled an increase in data service usage.

Average monthly revenues per subscriber was up 3.5 percent from last year.

Services such as Internet and data access, email and messaging have caused wireless data revenues to grow 52 percent from last year's second quarter to $2.5 billion.

Similarly, wireless Internet access revenues doubled since the previous second quarter and email, messaging and data access revenues all achieved an approximate 50 percent growth.

AT&T Wireless experienced tripled text messaging volumes since a year ago and a whopping 170 percent increase in multimedia message volumes.

An estimated 18 percent of AT&T's postpaid wireless subscribers had an integrated device by the end of the second quarter.

This is an 8 percent jump up from one year earlier. It is these subscribers average revenue per user that nearly doubled AT&T's average.

However, AT&T saw a 123,000 subscriber net gain decrease from 2007's second quarter. However, it is still up 38,000 from the first quarter of this year, totaling at 1.3 million.

These results are similar to those of retail postpaid net adds, which totaled 894,000. This was a 2 percent decrease from last year's second quarter and a 26.8 percent increase from the first quarter of this year, despite reduced iPhone sales before the iPhone 3G launch earlier this month.

The company is currently experiencing its lowest retail postpaid churn in history, which has moved down to 1.1 percent in the second quarter.

AT&T's second-quarter wireless operating expenses totaled $9 billion, and $3.1 billion in operating income. This presents a 91 percent increase from the $1.6 billion seen in the second quarter of 2007.

Wireless operating expenses totaled $8.4 billion and operating income was $3.6 billion, due to merger integration costs. This is yet another increase of 38.9 percent from $2.6 billion in last year's second quarter.

The telecoms holding company is attributing the strong revenue growth, network efficiencies and operational improvements to the strong wireless margins.

AT&T reported a 25.5 percent wireless operating income margin in the second quarter, up from 15.4 percent in the year-earlier quarter. Its adjusted wireless operating income margin was 29.9 percent, a 5 percent increase from the previous year.

Lastly, the operating income before depreciation and amortization - OIBDA - service margin is now at 41.2 percent, an increase from an unadjusted 35.8 percent and an adjusted 37.5 percent, divided by total service revenues.

"AT&T delivered strong wireless growth in the second quarter with solid subscriber gains, continued rapid growth in wireless data revenues and solid margins," Mr. Gatlin said. "We continue to make progress in key areas of the business.

"The second quarter demonstrates our ability to execute and the value of the assets we have assembled at AT&T," he said.