The new AT&T – a combination of SBC, BellSouth and Cingular Wireless – reported its first quarter 2007 earnings, and predictably all the numbers were up (revenues ), leading to gushing headlines everywhere. But like everything, one has to look at more than just the headline. For instance, the revenues are flat compared to the first quarter of 2006, if you take into account Cingular and BellSouth.

The bottom line – for AT&T broadband and wireless broadband are hot, and voice is not.

• AT&T’s broadband (DSL) connections – that increased by 691,000 in the quarter to around 12.9 million. Compared to the first quarter of 2006, the numbers are even more impressive: up 2.3 million, or 21.6 percent, on a pro forma basis over the past year.
• Wireless data revenues increased 66.8 percent to $1.5 billion, courtesy of more than 33 million active data customers, and up more than 30 percent over the past year. Wow… that’s 15% of their total wireless revenues of $10 billion (up 11.2% year-over-year.)
• AT&T says it now has UMTS/HSDPA coverage in 165 cities and is on schedule to cover virtually all of the top 100 U.S. markets this year.

But rest of the story doesn’t look that impressive.

• Primary consumer lines declined by 285,000 in the first quarter, compared with declines of 251,000 in the first quarter of 2006 and 331,000 in the fourth quarter of 2006.
• Regional consumer revenues were down 0.5 percent versus the year-earlier quarter, and excluding the impact of DSL Universal Service Fund charges, which were discontinued in the third quarter of 2006, they were up 0.3 percent.
• At the end of the first quarter, AT&T had 13,000 U-verse video subscribers, up from 3,000 three months earlier. As of April 24, U-verse subscribers in service had reached approximately 20,000.
• First quarter 2007 wireline revenues totaled $18.0 billion versus pro forma revenues of $18.6 billion (including BLS) for the first quarter 2006, down 3.2 percent.

Graphic via IPDemocracy