AT&T (T) had a good quarter, powered by its wireless service.

For the quarter ended March 31, 2008, AT&T’s revenues totaled $30.7 billion, up 6.1 percent versus reported results in the year-earlier quarter. The company reported first-quarter 2008 net income totaled $3.5 billion, up 21.5 percent from $2.8 billion in the year-earlier first quarter, and reported earnings per diluted share totaled $0.57, up 26.7 percent from $0.45 in the first quarter of 2007.

Total wireless revenues increased 18.3 percent versus the year-earlier first quarter to $11.8 billion. Wireless service revenues, which exclude handset and accessory sales, grew 17.1 percent to $10.6 billion. Wireless data revenues grew 57.3 percent versus results in the year-earlier first quarter to $2.3 billion,.

Growth in AT&T U-verse TV service, the company’s next-generation IP-based video service, continued its strong ramp during the first quarter, achieving a net subscriber gain of 148,000 to reach 379,000 in service. AT&T expects a further ramp in the quarters ahead and is on track to reach its target of more than 1 million subscribers by the end of 2008

The growth in U-Verse is bad news for cable firms like Comcast (CMCSA) and Time Warner Cable (TWC) who are seeing the fiber products from AT&T and Verizon (VZ) eating into their customer bases.

On the wireless front, the AT&T success is probably bad for Sprint (S), the No.3 player in the market. It has been trying to gain subscribers in a US market which is nearly saturated in terms of total wireless subscribers. Growth from AT&T may well be coming at Sprint’s expense. AT&T appears to continue to post successful sales of the Apple (AAPL) iPhone. It is the exclusive US distributor of the handset.

Douglas A. McIntyre

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