Summary
Wireless revenues are not only driving current profits but will continue to drive long term profits, as the cohort effect of current wireless users bring their habits with them as they age; and as new customers sign up for only wireless services. My college daughter college offers free wirelines in their dorms, but she said she did not need it. She uses her wireless device for all of her communications needs.
Analysis
One of my good friends travels and downloads books onto his iPhone, downloads professors lectures from major colleges through iTunes university, and generates much more revenue per user per lifetime than any traditional wireless customer.
This is because AT&T will continue to offer data services which include web surfing, facebook and myspace access, and texting, as users will spend more and more time on their "wireless phones", which are really an integrated communications platform with enormous revenue potential. The advertising reach of the current subscriber base can attract major advertisers like Coke and Pepsi.
AT&T and other major companies riding the new wave of the communications industry transformation will profit for many years to come. There are very few double digit growth categories left in the US, and wireless communications and entertainment is one of them.
The growth of broadband availability accelerated by the iPhone exclusivity will pay long term dividends as users become dependent on a continuous connection to the internet; AT&T will continue to increase profits even though the number of new wireless customers may slow.
