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Thursday, January 28, 2010, 06:25 am PT (09:25 am ET)

3.1M iPhone, 1M e-reader additions help AT&T gain on Verizon

AT&T exceeded expectations last quarter by adding 2.7 million new wireless subscribers and activating 3.1 million new iPhones, well ahead of the 2.2 million subscribers competitor Verizon added in the same period.

The activation of 3.1 million iPhones represented the second-highest quarter in the history of Apple's handset on the AT&T network. The best was in the summer of 2009, when the nation's second-largest wireless provider activated a record 3.2 million iPhones.

AT&T now has 85.1 million total subscribers, and continues to gain on Verizon, the market leader. Verizon, earlier this week, reported a total subscriber base of 91.2 million.

For all of 2009, AT&T added 7.3 million new subscribers, which was the company's best-ever annual total. AT&T reported 51 cents of diluted earnings per share in its fourth financial quarter, compared to 41 cents in the same frame of 2008.

AT&T also revealed Thursday that 1 million of its new customers were from non-phone devices, like the Amazon Kindle, Barnes & Noble Nook, and Sony Reader. AT&T recently struck deals with those companies to provide wireless access for the dedicated devices.

While the e-reader subscriptions helped to boost AT&T's overall total, the company lagged behind Verizon in terms of customers under contract. AT&T added 910,000 new customers under long-term deals, while Verizon acquired 1.2 million subscribers under contract. Customers on contract are far more profitable for wireless providers.

AT&T's role in the e-reader market — with no-contract data plans — is poised to grow even more, after Apple revealed Wednesday that its forthcoming iPad device will offer 3G access with the 9.7-inch touchscreen device. Plans will be $15 per month with a 250MB data cap, or $30 per month for unlimited data access. Both plans will come with no annual contract and can be added or canceled from the iPad at any time.

The 3G-enabled iPad will have a starting price of $629 for 16GB of storage and is expected to become available in three months. The device will ship unlocked, but GSM-only, and only supports AT&T's wireless 3G network in the U.S.