AT&T said its wireless profit will also be reduced by higher than expected sales of smartphones such as the Apple Inc iPhone in the quarter.
Because AT&T and its rivals tend to pay a hefty subsidy for each smartphone they sell, high phone sales put pressure on wireless profit margins. They pay subsidies so they can offer phone discounts to consumers who commit to long-term contracts.
AT&T said on Thursday that it sold 10.2 million smartphones in the quarter, which would imply sales of about 26.9 million for 2012 up from its December forecast for 26 million.
AT&T had said at the beginning of 2013 that it hoped to keep smartphone sales at around 25 million for the year."