AT&T earnings rise but new wireless subscribers slow

The number of people joining the network through resellers and non-phone devices, like the Kindle and GPS navigation systems, dropped sharply in the first quarter. The largest telecommunications company in the US says it gained a net 726,000 wireless subscribers in the first quarter. That's less than a third of the number added in the same period last year.

In the quarter, old contract-based plan customers departed faster than AT&T could recruit new customers. Contract-based plans are the most lucrative for a phone company, and the number of new customers is an important measure of growth. AT&T gained a net 187,000 customers on contract-based plans in the January to March period, but these were essentially all tablet users, brought in by the launch of the new iPad in March. Tablet customers pay between $15 and $50 per month, whereas smartphone customers often pay more than $100. Weak subscriber figures are usually good for a phone company's earnings in the short term, since it doesn't have to subsidize the purchase of new devices.