AT&T CEO Randall Stephenson attributed the strong performance to the company's commitment to working aggressively to give customers more choice about how, when, and where they communicate.

"We've made sound strategic moves to better serve customers and expand our potential in key growth areas," Stephenson said. "Our results show the benefit of these efforts."

On the Cutting Edge

AT&T's most impressive results came from the company's wireless business, which recorded third-quarter revenue of $10.9 billion -- up by 14.4 percent year-over-year. "We had just an excellent growth quarter in wireless," said AT&T Chief Financial Officer Rick Lindner. "And over the last four quarters we have grown our wireless subscriber base by seven million, all organically."

Lindner noted that AT&T has been aggressively pursuing the exclusive launch of "cutting-edge wireless devices that have raised the bar" with respect to what wireless customers now expect from data service and entertainment options. "The Apple iPhone is certainly part of that," Lindner said.

AT&T's net subscriber additions were up by 46.8 percent in comparison with the year-earlier quarter. The U.S.'s No. 1 wireless carrier had 65.7 million subscribers at the end of the third quarter -- a record two million increase over the prior reporting period. Many new customers had elected to switch carriers in order to acquire Apple iPhones.

Approximately seven million AT&T Wireless customers are now using 3G devices, Lindner indicated. Moreover, a five million track Napster library is slated to become available to AT&T Wireless subscribers beginning next month.

Wireless Data Growth

Revenue from AT&T's wireless data services rose by a robust 63.9 percent year-over-year to $1.8 billion in the third quarter. "For AT&T and for the industry, growth is increasingly coming from robust data-centric mobility services, from business markets, and from converged services as customers expect seamless interactivity across wireless, broadband, traditional voice and video service platforms," Lindner said.

"This was our fifth quarter of wireless data growth above 60 percent," Lindner explained. "Data now accounts for more than 18 percent of our total wireless service revenues."

Lindner also said the company increased its high-speed Internet customer base in the third quarter to 13.8 million subscribers, up by 499,000 from the prior three-month period. Moreover, AT&T's total video connections -- including its fledgling IP-based video and bundled satellite TV services -- had increased by 215,000 to 2.1 million.

At the end of the third quarter, 6.7 percent of the company's primary consumer lines were receiving video programs from AT&T -- up from 4.2 percent one-year earlier.

"These accomplishments reinforce our positive outlook for 2007 and the years ahead," Stephenson explained. "We've made sound strategic moves to better serve customers and expand our potential in key growth areas. And our strong cash flow allows us to invest in the future of our business as we return substantial value to shareowners."