Despite losing exclusive rights in the United States to sell Apples venerated iPhone, AT&T activated 3.6 million of the devices in the first quarter.
Thats up from 2.7 million activations in the quarter a year ago when AT&T was the only U.S. mobile operator with rights to sell the iPhone.
In January, AT&T cut the price of the iPhone 3G S to $49 as its chief rival, Verizon Wireless, prepared to begin selling the iPhone 4. Verizon will release its results tomorrow.
Some analysts were anticipating that AT&Ts earnings would reflect disappointing wireless results, but the company on Wednesday said it added 2 million subscribers, including 62,000 postpaid retail customers.
That brings AT&Ts total number of subscribers to 97.5 million.
Dallas-based AT&T also reported that its churn the percentage of subscribers who ditch the operator for a competitor was relatively stable. AT&T reported churn of 1.36 percent, slightly up from 1.30 percent in the first quarter of 2010 and 1.32 percent in the fourth quarter of 2010.
AT&Ts total wireless revenues, including equipment sales, climbed 10.2 percent year over year to $15.3 billion.
Smartphone sales are contributing to the wireless growth at AT&T. The carrier said 46 percent of its 68 million postpaid subscribers had smartphones.
AT&T also reported gains in the number of data-only devices sold, such as tablets. The company sold 421,000 of such devices, including 322,000 tablets.
For the quarter, AT&T reported consolidated revenues of $31.2 billion while net income attributable to the company was $3.4 billion.