AT&T Shrugs Off Verizon Challenge with Increased iPhone Activations During Q1

On Wednesday morning, AT&T announced what some are calling ‘Verizon-proof’ earnings.

Despite the arrival of the iPhone 4 on the Verizon network in the US earlier this year, AT&T still activated 3.6 million iPhones during the first quarter of 2011, a substantial increase of 33% over Q1 2010.

All told, revenue spiked more than 2% to $31.2 billion (57 cents a share), meeting Wall Street’s expectations.

“We delivered another robust mobile broadband growth quarter for a very solid start to the year,” says Randall Stephenson, the carrier’s chairman and chief executive officer. “We posted double-digit wireless revenue growth, and we set new first-quarter records in total net adds, connected device net adds and smartphone sales. Growth in tablets and other branded computing subscribers also continues to be strong.”

Stephenson’s reference to “growth in tablets” is somewhat of an exaggeration, however. For the quarter, A&T saw just 322,000 tablet activations – a notable decrease. Nonetheless, the carrier managed to welcome into the fold a total of 62,000 new wireless contract users in the quarter.

AT&T’s subscriber base currently sits at 97.5 million, 12% larger than last year at this time.

Although the carrier’s earnings were strong, David Burks, an analyst with Hilliard Lyons Inc., tells Bloomberg that “we should also caution that Verizon was able to begin selling the product in early February, so this doesn’t represent a full quarter of competition.”