AT&T Riding High on Merger, Wireless Revenues

AT&T reported strong financial results for the first quarter of 2007 on Tuesday, including doubling its earnings over those from the same quarter a year ago.

The San Antonio-based company reported net income of US$2.8 billion, or 45 cents per share, for the period ending March 31, compared with $1.4 billion, or 37 cents per share, a year ago.

Behind those rosy results are the acquisition of BellSouth — which the company said resulted in savings of about $300 million in the first quarter — along with growth in wireless revenue, which was up to $10 billion, an increase of more than 11 percent since last year.

Less ‘Churn’

AT&T acquired BellSouth last year for $67 billion; this was the company’s first full quarter since the merger took place.

“We had an outstanding start to the year,” said Edward E. Whitacre Jr., AT&T chairman and chief executive officer. “Merger integration is on track, volumes continue to be solid and we expanded margins in both wireless and wireline.”

AT&T also reported gains in wireless data revenue, which was up 66.8 percent over the same quarter a year ago, and reductions in subscriber “churn,” or the rate at which subscribers drop the service. Average monthly subscriber churn for AT&T’s postpaid wireless customer base was 1.3 percent in the first quarter — its best rate ever, down from 1.6 percent in the year-ago quarter and 1.5 percent in the fourth quarter of 2006.

“They beat our estimates by 5 cents thanks to cost savings and a faster share-buyback program,” Standard & Poor’s analyst Todd Rosenbluth told the E-Commerce Times. “We think these trends are going to continue throughout 2007.”

Cause for Concern?

The number of new subscribers added to AT&T’s wireless service was the one area that caused some widespread disappointment among observers, with 1.2 million added in the first quarter, for a total of 62.2 million. That’s up 11.5 percent, but many analysts were hoping for gains more like 1.5 million, Stifel Nicolaus analyst Chris King told the E-Commerce Times.

“Certainly wireless growth disappointed the street, and that had a negative impact,” King said, though the numbers were in line with his firm’s expectations.

The company’s shares were down 56 cents to $39.21 in early afternoon trading on Tuesday.

“Compared with prior periods, the growth was a little more limited,” agreed Rosenbluth. However, when growth exceeded the 1.5 million mark in the past, it was generally through prepaid customer growth, he noted, whereas in this quarter’s report, much of the growth came from postpaid customers, he said. “We think the postpaid market is the most important for the company. It bodes well that that’s where it’s seeing gains.”

Looking Ahead

AT&T’s traditional wireline business is facing challenges, Rosenbluth said. “More important, however, the stock has been an extremely strong performer,” he added. Standard & Poor’s currently has a hold rating on the stock.

Stifel Nicolaus also has a hold rating on AT&T stock, King said, and that has been in place since before the first-quarter report. “I don’t think there’s anything that’s hugely impactful one way or the other out of these numbers,” he stated. “It was largely in line.”

Because AT&T has excluded so many costs from its pro forma, however — amounting to roughly $2 billion, King said — “It’s a company that’s difficult for us to get our arms around.”

Moving forward, two factors could limit AT&T’s top-line growth potential, King added. First, wireless penetration rates in the United States have reached about 80 percent, and could indicate slowing growth throughout the industry. Second, “we’re beginning to see a slowdown in IT spending across the board,” he said, “and that could pressure the top line even more.”

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OPINION

How Not To Do CX, Lenovo Style

Sometimes the world of smart technology innovations collides with the planet of dumb customer service provisions. That collision usually does not bode well for the customer.

In my case, that scenario is particularly true. I bought Lenovo’s Chromebook Duet 5 for an attractive price from a major national electronics store. In hindsight, that was a purchase I wish I could undo.

The Duet 5 is regarded in numerous reliable reviews as the best overall ChromeOS tablet/detachable computer available this year. Its larger screen and detachable full-size keyboard make a usable and fun tablet experience not available with pure Android devices.

For me, that accolade falls far short of reaching that mark. In fact, if your primary need for a Chromebook is to run Linux apps, think again about not buying Lenovo’s Duet 5. You might get a unit like mine that does not do Linux even though it is supposed to work. That failure is not considered a valid claim under Lenovo’s warranty.

I have become quite fond of Chromebooks. ChromeOS devices supplement my home office cadre of Linux computers. They link to my Android phone and its apps. I can run the same productivity apps and access their data directly on the Chromebook.

What fed my attraction to the Duet 5 is its logical follow-up to the very popular 10.1″ original Duet I bought a few years ago. The Duet line has a detachable keyboard and is a stand-alone ChromeOS tablet.

Putting want versus need aside, I debated the prospect of more productivity and convenience with a bigger screen at 400 nits, larger keyboard, and 8GB of RAM. I knew the manufacturer and the retail store as well as the product line. Or so I thought.

What could go wrong? Three things: a failed product, no support, and a warranty that also did not work!

Maybe One Too Many

The last thing I needed to buy was yet another Chromebook. Over the last few years, I have used four or five models from HP, Lenovo, and Asus.

The Duet 5 seemed to check all the boxes. As it turned out, the check mark fell out of the box for reliable tech support and customer service.

Nope, I could not return the computer. By the time I discovered its defective nature the undo window had closed.

I suppose this incident will nudge me to buy expensive add-on store warranties for less expensive electronic devices. Adding insult to injury, Lenovo tech support said the malfunction was “beyond the scope of the manufacturer’s one-year warranty.”

A final correspondence from Lenovo’s tech support told me that if I shipped the device to its repair facility, all the technicians would do is reset the unit to its original OS status and remove Linux.

Heck, I had already done the same thing twice.

Lenovo Buyers Beware

This account is not intended to be a product review. Rather, it tells what happens when corporate arrogance destroys the customer experience.

I usually write about business technology issues and open-source developments impacting the Linux OS. My reporting beat overlaps with e-commerce and customer relationship management (CRM) issues.

As a tech writer and product reviewer, I am used to manufacturers sending me top-of-their-line products in hopes of showing off their best wares. Marketing marvels often offer high-end configurations to curry consumers’ attention. They go out of their way to make sure the reviewer is fully satisfied.

Too bad that mentality does not always exist when lowly consumers are on the receiving end. But I was not using a loaner unit I would send back anyway, satisfied or not. I bought this model with no plans to review it. I just wanted to use it.

My personal experience hardened my resolve to not buy a Lenovo product going forward. Not because of a bad product encounter. Lenovo lost my customer loyalty because of shoddy customer service and no dedication to resolving my issue with a malfunctioning computer that they built.

The Gory Details

According to Lenovo’s ill-conceived logic, the warranty on Chromebooks does not cover user modifications. Since I activated the Linux partition, ran into a problem, removed the partition, and reinstalled Linux apps not there when I bought it, I was guilty of modifying the device.

To clarify, all Chromebooks require the user to turn on the Linux partition and install Linux apps. That is the same process for using Android apps on Chromebooks.

Chromebooks are built to run the ChromeOS and optionally to run in separate built-in containers Android and Linux software. Google certifies the hardware to ensure the software works.

The ChromeOS similarly enables users to access websites in a browser environment. An added option lets users access those web destinations to run application services within tabbed browser windows or as progressive web apps (PWAs) in their own isolated windows.

That is what Chromebooks are designed to do on any manufacturer’s hardware. Turning these built-in features on/off should not be construed as “modifying” the device.

Tech Support Hell

A few weeks after receiving the Duet 5, I experienced only an intermittent screen flickering issue. That cleared up after a system update. No worries. No concerns.

At that point I turned on the Linux partition and installed the same Linux apps that I use on my other lesser-endowed Chromebooks. Those devices worked fine with the same apps installed.

But the Lenovo Duet 5 froze after loading the Linux apps and running for a few minutes. Glitchy installations happen. So I did what is standard troubleshooting. I reset the ChromeOS to its original status. I then set up the Linux partition and sized it well beyond the Google-recommended minimum size.

Problem NOT solved. So I wiped the Linux partition again. This time, I installed a single Linux app one at a time looking for the culprit throwing the others out of whack. Every Linux app in isolation froze.

Lenovo tech support declined to investigate or test the hardware. The agents suggested finding an affiliated tech center to pursue a solution.

Stuck With No Options

I gladly would have done that. But the nearest such Lenovo repair center was across state lines some 150 miles away.

I reached out to the Google Chromebook support community for an alternative solution. A support person there had me run the “df command” in a Linux terminal to determine the physical health of the partition.

The readout from that diagnostic confirmed the device has a valid and working Linux container. That partially settled the question about the hardware. It did not, however, identify what other hardware issues might be involved.

The Google support forum tech then suggested I look for one or more dud packages by following the procedure outlined above. But, of course, I already did that several times.

Lousy Lessons Learned

If you plan to buy a Chromebook just to have easy access to selected Linux apps, seriously consider my experience. Maybe look elsewhere instead of the Duet 5. Numerous Chromebook alternatives exist.

Who knows? Maybe the Linux apps will work fine for you on your Duet 5. As I said, I have not had this situation on any other Chromebook product I use.

No doubt my experience was a gross anomaly. The aggravating part in all of this is that I will never know the cause.

But if you buy a Duet 5 from a retail outlet instead of directly from the manufacturer, be sure to confirm how that store honors the warranty. You now know how Lenovo honors its warranty.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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Coding Vulnerabilities, Linux Growth, FOSS Friction Cap Summer Highlights

Open Source

As IT workers continue their daunting job of protecting network users from bad guys, a few new tools might help stem the tide of vulnerabilities that continue to link open source and proprietary software.

Canonical and Microsoft reached a new agreement to make their two cloud platforms play nicer together. Meanwhile, Microsoft apologized to open-source software devs. But no apology was rendered for BitLocker locking out Linux users.

Let’s get caught up on the latest open-source software industry news.

New Open-Source Tool Helps Devs Spot Exploits

Vulnerability software platform firm Rezilion on August 12 announced the availability of its new open-source tool MI-X from the GitHub repository. The CLI tool helps researchers and developers quickly know if their containers and hosts are impacted by a specific vulnerability to shorten the attack window and create an effective remediation plan.

“Cybersecurity vendors, software providers, and CISA are issuing daily vulnerability disclosures alerting the industry to the fact that all software is built with mistakes that must be addressed, often immediately,” said Yotam Perkal, director of vulnerability research at Rezilion.

“With this influx of information, the launch of MI-X offers users a repository of information to validate exploitability of specific vulnerabilities, creating more focus and efficiency around patching efforts,” he added.

“As an active participant in the vulnerability research community, this is an impactful milestone for developers and researchers to collaborate and build together,” Perkal noted.

Current tools fail to factor in exploitability as organizations grapple with a litany of critical and zero-day vulnerabilities, and scramble to understand if they are affected by that vulnerability. It is an ongoing race to figure out the answer before a threat actor does.

To make this determination, organizations need to identify the vulnerability in their environment and ascertain if that vulnerability is truly exploitable to have a mitigation and remediation plan in place.

Current vulnerability scanners take too long to scan, do not factor in exploitability, and often miss it altogether. That is what happened with the Log4j vulnerability. The lack of tools gives threat actors a lot of time to exploit a flaw and do major damage, according to Rezilion.

The introduction of MI-X is the first of a series of initiatives Rezilion plans to foster a community around detecting, prioritizing, and remediating software vulnerabilities.

Linux Thrives, Along With Growing Security Woes

Recent data monitoring of more than 63 million computing devices across 65,000 organizations shows the Linux OS is alive and well within businesses.

New research from IT asset management software firm Lansweeper shows that even though Linux lacks the more widespread popularity of Windows and macOS, plenty of corporate devices run Linux operating systems.

Scanning data from more than 300,000 Linux devices across some 26,000 organizations, Lansweeper also uncovered the popularity of each Linux operating system depending on the total amount of IT assets managed by each organization.

The company released its finding August 4, noting that around 32.8 million people use Linux globally, with about 90% of all cloud infrastructure and almost all the world’s supercomputers being dedicated users.

Lansweeper’s research revealed CentOS is the most widely used (25.6%) followed by Ubuntu (20.8%) and Red Hat (15%). The company did not break out the percentages for users of the numerous other Linux OS distributions in use today.

Chart shows Linux devices by company size


Lansweeper suggested that businesses demonstrate a disconnect between using Linux for its enhanced security and proactively putting security processes in place.

Two recent Linux vulnerabilities this year — Dirty Pipe in March and Nimbuspwn in April — plus Lansweeper’s new data, show that when it comes to protecting what is under their own roof, businesses are going in blind.

“It’s our belief that most of the devices running Linux are business-critical servers, which are the desired target for cybercriminals, and logic shows that the larger the company grows, the more Linux devices there are that must be protected,” said Roel Decneut, chief strategy officer at Lansweeper.

“With so many versions and ways to install Linux, IT teams are having to grapple with the complexity of tracking and managing the devices as well as trying to keep them protected from cyberattacks,” he explained.

Since its launch in 2004, Lansweeper has been developing a software platform that scans and inventories all types of IT devices, installed software, and active users on a network. This allows organizations to centrally manage their IT.

BitLocker, Linux Dual Booting Not Perfect Together

Microsoft Windows users who want to install a Linux distribution to dual boot on the same computer are now between a technological rock and a Microsoft hard place. They can thank an increased use of Windows BitLocker software for the worsening Linux dual-booting dilemma.

Developers of Linux distros are fighting more challenges in supporting Microsoft’s full-disk encryption on Windows 10 and Windows 11 installations. Fedora/Red Hat engineers noted that the problem is worsened by Microsoft sealing the full-disk encryption key is sealed using the Trusted Platform Module (TPM) hardware.

Fedora’s Anaconda installer along with other Linux distribution installers cannot resize BitLocker volumes. The workaround is first resizing BitLocker volumes within Windows to create enough free space for the Linux volume on the hard drive. That useful detail is not included in what are often flimsy installation instructions for dual-booting Linux.

A related problem complicates the process. The BitLocker encryption key imposes another fatal restriction.

In order to unseal, the key must match the boot chain measurement in the TPM’s Platform Configuration Register (PCR). Using the default settings for GRUB in the boot chain for dual boot setups produces the wrong measurement values.

Users trying to dual boot then get dropped to a BitLocker recovery screen when trying to boot Windows 10/11, according to discussions of the problem on the Fedora mailing list.

Microsoft, Canonical: A Case of Opposites Attract

Canonical and Microsoft have tightened the business knot connecting them with the common goal of better securing the software supply chain.

The two software companies on August 16 announced that native .NET is now available for Ubuntu 22.04 hosts and containers. This collaboration between .NET and Ubuntu provides enterprise-grade support.

The support lets .NET developers install the ASP.NET and .NET SDK runtimes from Ubuntu 22.04 LTS with a single “apt install” command.

See full details here and watch this brief video for the update:

Microsoft Reverses Open-Source App Sales Ban

In what might well be the latest case of Microsoft opening its marketing mouth to insert its stumbling foot, the company recently upset software developers by implementing a ban on the sale of open-source software in its app store. Microsoft has since reversed that decision.

Microsoft had announced new terms for its app store to take effect July 16. The new terms stated that all pricing cannot attempt to profit from open source or other software that is otherwise generally available at no cost. Many software developers and re-distributors of free- and open-source software (FOSS) sell installable versions of their products on the Microsoft Store.

Redmond maintained its new restrictions would solve the problem of “misleading listings.” Microsoft claimed FOSS licenses permit anyone to post a version of a FOSS program written by others.

However, developers pushed back noting the problem is easily solved the same way regular stores solve it — through trademark names. Consumers can tell genuine sources of software products from third-party re-packagers with trademark rules that already exist.

Microsoft has since acquiesced by removing references to open-source pricing restrictions in its store policies. The company clarified that the previous policy was intended to “help protect customers from misleading product listings.”

More information is available in the Microsoft Store Policies document.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.

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