AT&T Customer Growth Improves as Margins Shrink

AT&T Inc. (T), the biggest U.S. phone carrier, said second-quarter TV, Internet and mobile-phone subscriber growth is improving compared with a year earlier, while the costs to lure customers is cutting into profits.

The company expects to report that 500,000 new mobile-phone subscribers signed up for contracts during the quarter, it said yesterday in a statement. That compares with 296,000 a year earlier. While wireless profit margins will be similar to the first quarter, overall margins will decline compared with the second quarter of 2012 because of “customer additions and investments in new growth opportunities,” it said.

AT&T continues to expect revenue growth in 2013 of more than 2 percent, it said. The company is counting on video and Internet service in its landline and wireless divisions to fuel growth as the traditional phone business subsides.

The carrier, based in Dallas, also expects to report an additional $1 billion in cash proceeds from the sale of America Movil SAB shares and a distribution from YP Holdings LLC, the yellow-pages publisher in which it still holds a stake.

AT&T fell 1 percent to $35.44 at the close in New York. The shares have climbed 5.2 percent this year.

To contact the reporter on this story: Crayton Harrison in New York at tharrison5@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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