AT&T Wireless 2009 Annual Report Download - page 39

AT&T 09 AR 37
 •Localvoicerevenuesdecreased$2,763,or12.2%,in
2009anddecreased$1,887,or7.7%,in2008.The
decreasein2009wasdrivenprimarilybyan11.2%
declineinswitchedaccesslinesandadecreasein
averagelocalvoicerevenueperuser.Thedecrease
in2008wasdrivenprimarilybyalossofrevenueof
$1,230fromadeclineinaccesslinesandby$422
fromadeclineinournationalmass-marketcustomer
baseacquiredfromAT&TCorp.(ATTC).Weexpectour
localvoicerevenuetocontinuetobenegatively
affectedbyincreasedcompetitionfromalternative
technologies,thedisconnectionofadditionallines
andeconomicpressures.
 • Long-distancerevenuesdecreased$2,133,or15.3%,in
2009anddecreased$1,195,or7.9%,in2008primarily
duetodecreaseddemandfrombusinessandconsumer
customers,whichdecreasedrevenues$1,583in2009
and$532in2008,andanetdecreaseindemandfor
long-distanceservice,duetoexpecteddeclinesinthe
numberofnationalmass-marketcustomers,which
decreasedrevenues$546in2009and$677in2008.
Datarevenuesincreased$1,370,or5.4%,in2009and
increased$1,278,or5.3%,in2008.Datarevenuesaccounted
forapproximately41%ofwirelineoperatingrevenuesin2009,
36%in2008and34%in2007.Datarevenuesincludetransport,
IPandpacket-switcheddataservices.
Operating Margin Trends
OurWirelinesegmentoperatingincomemarginwas12.1%
in2009,comparedto16.0%in2008and16.7%in2007.
Resultsfor2009and2008reflectrevenuedeclinesthat
exceededexpensedeclines.OurWirelinesegmentoperating
incomedecreased$3,278,or29.2%,in2009anddecreased
$781,or6.5%,in2008.Ouroperatingincomecontinued
tobepressuredbyaccesslinedeclinesduetoeconomic
pressuresonourconsumerandbusinesswirelinecustomers
andcompetition,ascustomerseitherreducedusageor
discon
nectedtraditionallandlineservicesandswitched
toalternativetechnologies,suchaswirelessandVoIP.
Ourstrategyistooffsettheselinelossesbyincreasing
non-access-line-relatedrevenuesfromcustomerconnections
fordata,videoandvoice.Additionally,wehavethe
opportunitytoincreaseWirelesssegmentrevenuesif
customerschooseAT&TMobilityasanalternativeprovider.
Wirelineoperatingmarginsaredecliningprimarilydueto
reducedvoicerevenue,partiallyoffsetbycontinuedgrowthin
datarevenue.Alsocontributingtopressureonouroperating
marginswasincreasedpension/OPEBexpensein2009.
Voicerevenuesdecreased$5,116,or13.4%,in2009,
anddecreased$3,432,or8.2%,in2008primarilydueto
continuingeconomicpressuresanddecliningdemandfor
traditionalvoiceandotherlegacyservicesbyourconsumer
andbusinesscustomers.Includedinvoicerevenuesare
revenuesfromlocalvoice,long-distanceandlocalwholesale
services.VoicerevenuesdonotincludeVoIPrevenues,which
areincludedindatarevenues.
Wireline
Segment Results
 PercentChange
2009 vs. 2008vs.
2009 2008 2007 2008 2007
Segmentoperatingrevenues
Voice $33,082 $38,198 $41,630 (13.4)% (8.2)%
Data 26,723 25,353 24,075 5.4 5.3
Other 5,865 6,304 5,878 (7.0) 7.2
TotalSegmentOperatingRevenues 65,670 69,855 71,583 (6.0) (2.4)
Segmentoperatingexpenses
Operationsandsupport 44,646 45,440 46,177 (1.7) (1.6)
Depreciationandamortization 13,093 13,206 13,416 (0.9) (1.6)
TotalSegmentOperatingExpenses 57,739 58,646 59,593 (1.5) (1.6)
SegmentOperatingIncome 7,931 11,209 11,990 (29.2) (6.5)
EquityinNetIncomeofAffiliates 18 19 31 (5.3) (38.7)
SegmentIncome $ 7,949 $11,228 $12,021 (29.2)% (6.6)%