The darker the color, the higher percentage of CP&L customers without electric service. Areas in gray are served by other electric utilities.

Although less hard-hit than New Jersey, Connecticut residents will wait almost as long as customers further south for restoration of electric service, with AT&T getting its own services back up and running only after electric utility repair crews finish work.

Customers across the state are experiencing power outages that range from a handful of homes to near-complete blackouts that utility companies predict will take at least a week to repair. For a second day, AT&T continued to leave its customers in the dark, with nothing more than a general statement it continued to “assess the damage” to its wired and wireless networks that “have issues” across Connecticut.

In fact, AT&T’s most visible effort for Connecticut customers waiting for service is a website promotion asking for $10 donations for the American Red Cross, conveniently billed to your AT&T account.

“Why did I expect anything more from AT&T when they never seem to be terribly interested in customer service generally,” complains Stop the Cap! reader Bethany Johnson, also a U-verse customer e-mailing us from a friend’s phone on Verizon Wireless. “AT&T customer service won’t say anything to us and you can’t find a thing on their website with the same old statements on the news.”

Johnson says Connecticut Light & Power (CL&P) restored her electric service early this morning, but U-verse is out and her AT&T cell phone no longer has any signal from her home.

“When you call AT&T, one of their call centers answers and they just read out some statement that tells you nothing,” she says. “Verizon Wireless and Cablevision are falling all over each other trying to give us updates, but AT&T can’t be bothered.”

Johnson says her friends with Verizon Wireless seem to have weathered Hurricane Sandy better than she did, with much more sporadic AT&T cell service afflicting customers across Connecticut.

“My husband drives for a living and he says AT&T’s cell network as of today along the roads he travels really took a beating and he often can’t get in touch with me,” Johnson said. “AT&T says they have ‘issues’ in Connecticut and I am getting to the point where I am having an issue with them. Just tell us what is going on, we can take it.”

United Illuminating is reporting 137,983 customers without power; more than 43 percent of its service area. Nearly all of UI’s customers in the Southport section of Fairfield have no electric service, followed by Weston at 90 percent, Trumbull with nearly 85 percent, Monroe at nearly 82 percent and Bridgeport at 71 percent.

CL&P is reporting 351,910 or about 28 percent of its customers without power. In southwestern Connecticut, more than half of CL&P’s customers are in the dark in Darien, Greenwich, New Canaan, Westport, Wilton, Weston, Newtown, Monroe and Danbury.

Hurricane Sandy’s destructive forces of wind and water, combined with extensive electrical outages has wreaked havoc with telecommunications services from Maine to Virginia, leaving some customers potentially without service for weeks.

The storm has flooded Verizon‘s central switching offices in New York City, did extensive damage to Sprint’s wireless network and infrastructure, has left large sections of upstate and downstate New York without cable service, and clocks ticking for wireless cell customers using cell sites currently running on battery backup power.

Some of the worst problems are affecting Verizon’s landline and FiOS networks after the company lost two critical switching centers in Manhattan to extensive flooding. That has contributed to significant problems for Verizon customers across Manhattan, Queens, and Long Island. Further afield, Verizon customers without service can blame power outages and fallen trees that took out overhead wiring. Together, Verizon customers are experiencing significant problems with landline, broadband, and FiOS TV and Internet services in some areas.

Many Verizon Wireless cell sites are operating on battery backup units which maintain service for only a limited time. New York, New Jersey and Connecticut customers report increasing difficulty maintaining cell service signals as those battery backup units start to fail. Verizon engineering crews can restore undamaged cell sites with backup generators once permitted into storm-ravaged areas.

One of the hardest hit wireless carriers

Cablevision‘s business largely depends on areas that took a direct hit from Hurricane Sandy. Cablevision repair crews are encountering extensive power outages and damaged overhead wiring brought down during the storm in Connecticut and Long Island. Its service area closer to New York City has been primarily affected by power outages. Comcast said it was still starting an assessment process and was not prepared to report on the current state of its network, which operates in cities north and south of the New York City metro area.

While Time Warner Cable spokesman Alex Dudley reports little damage to Time Warner Cable’s systems, many remain offline from power interruptions, and Time Warner’s Twitter feed for upstate New York reports isolated outages in Portland, Maine and across upstate New York, primarily due to power losses or damage to infrastructure.

Sprint appears to be the hardest hit wireless carrier with widespread service outages, interruptions and call completion issues throughout the states of New York, New Jersey, Connecticut, Pennsylvania, Washington DC, Maryland, North Virginia and New England. Some customers far away from the worst-hit areas report trouble making and receiving calls on Sprint’s network. Many cell sites are also damaged.

AT&T is assessing damage to its landline operations in Connecticut, where it is the dominant phone company. Many AT&T cell phone sites, like Verizon, are operating on battery backup in power outage areas until AT&T can bring generators online to maintain service.

T-Mobile and MetroPCS report damage and service outages to their cellular networks as well, mostly from power outages.

Lyndhurst, NJ

Even old style communications networks were not spared from Hurricane Sandy. The Northeast Radio Watch reports a large number of broadcasters across the region off the air as of this morning:

• Outside of WOR (710), most New York City area AM stations are off the air. WOR survived the storm with its recently built three tower site located just above the flood waters. Chief engineer Tom Ray told NERW the water is 10 feet deep at WOR’s transmitter site in the Meadowlands. Many AM stations in New York favor transmitter locations in now-ravaged Lyndhurst and the Meadowlands. The result: indefinite absence of all-news WINS (1010) (it’s now back up — thanks to an update from Scott Fybush), which is now being heard on WXRK (92.3). Also missing: WLIB (1190), WSNR (620), WMCA (570), WNYC (820), WPAT (930), WNYM (970), WADO (1280) and WWRV (1330). FM outlets favor much higher transmitter locations, usually atop large skyscrapers, that escaped flood damage.
• WABC continues to air the audio portion of its broadcast on WEPN-AM (1050) and FM (98.7) for the benefit of those without power. WCBS studios are currently powered “by candlelight.”
• The Jersey shore’s FM outlets are mostly silent. Atlantic City was among the hardest hit, and some stations may be off the air for some time while rebuilding.
• Connecticut stations are also off the air. Powerhouse WICC (600) in Bridgeport has transmitters on Long Island Sound — a poor choice to withstand Sandy. It is likely underwater. Also gone: WGCH (1490 Greenwich), WAXB (850 Ridgefield) and WSHU (1260 Westport) and WALK-FM (97.5 Patchogue).

Repair crews for all concerned will likely only start assessing damage later today, but many will have to wait for power crews to complete work — they have first priority. Those lucky enough to see service restoration once power returns will be in far better shape than others who could wait weeks to get their Internet, television and phone service back.

Correction: Original story included reference to studio power knocked out at WOR-TV. That should have said WOR-AM (radio). 

In another sign competition between cable and phone companies may not be as robust as they would have you believe, Comcast last week announced a deal to sell local advertising on behalf of AT&T U-verse.

Under the agreement, Comcast’s Spotlight ad sales division will now sell local advertising slots on behalf of AT&T’s U-verse in cities where both companies provide service.

Comcast says the agreement will cover 21 cities, including:

• Atlanta
• Champaign-Springfield-Decatur (Ill.)
• Chicago
• Detroit
• Flint-Saginaw-Bay City (Mich.)
• Fresno-Visalia (Calif.)
• Grand Rapids-Kalamazoo-Battle Creek (Mich.)
• Hartford-New Haven (Conn.)
• Houston
• Indianapolis
• Jackson, Miss.
• Jacksonville (Fla.)
• Lansing (Mich.)
• Little Rock-Pine Bluff (Ark.)
• Memphis
• Miami-Ft. Lauderdale
• Monterey-Salinas (Calif.)
• Nashville
• Sacramento-Stockton-Modesto (Calif.)
• San Francisco
• West Palm Beach-Ft. Pierce (Fla.)

This leaves Comcast with a lock on local ad sales for both its own cable and AT&T’s U-verse systems. Most major cable networks offer their affiliates opportunities to insert local commercials during certain advertising breaks. The ad insertions provide a lucrative revenue stream for pay television providers, which can target viewers of specific cable networks or run the same messages across hundreds of cable channels.

The deal will save AT&T from having to hire additional employees to handle local ad sales and will let advertisers cover one or both systems in a single ad buy.

But critics wonder if Comcast cooperating this closely with AT&T is good for competition.

The deal is not unprecedented, however. AT&T has also partnered with Charter Cable to cross market local ad sales in cities where U-verse and Charter compete head to head.

With a declining number of Americans willing to pay AT&T’s prices for smartphones and wireless service plans, AT&T’s future revenue growth will increasingly depend on getting the company’s current customers to pay more for data and adopt new types of wireless communications services.

After a quarterly earnings report found AT&T subscriber growth falling far behind its larger rival Verizon Wireless, AT&T appears ready to concede there is a finite number of new customers to be won from endless battles for market share.

AT&T was expected to add 358,000 new customers in the previous quarter, but only managed to attract 151,000. Demand for the latest Apple iPhone has yet to meet available supply, with most iPhones obtained by AT&T allocated to existing customers. AT&T exclusively launched the iPhone in the United States in 2007 and retains the largest share of iPhone owners, even after the phone became available from other carriers. Verizon Wireless had fewer problems adding new customers because it is not nearly as dependent on Apple.

de la Vega

Despite lackluster subscriber growth, AT&T reported stellar revenue during the quarter, partly from rate increases and the launch of usage-limited, family share plans. AT&T also continued to benefit from  tax savings, share buybacks, and refinancing debt at lower interest rates. With fewer customers adding subsidized phones, AT&T also paid fewer subsidies.

AT&T’s profit rose to $3.64 billion, or 63 cents per share, up from $3.62 billion, or 61 cents per share — $.03 ahead of Wall Street expectations.

AT&T can thank its wireless data services for a significant chunk of their earnings, with more to come.

The company reported more than 2/3rd’s of their customers (28+ million) are now on usage-based pricing plans. That is 10 million more than a year ago. The company’s new mobile share plans have attracted almost two million subscribers during the first five weeks they were on offer. More than one-third of those customers are choosing the company’s 10GB data allowance, which costs the customer $150 a month with unlimited talk and texting ($30 a month for each additional smartphone on the account.) Around 15% of new mobile share customers are choosing to abandon their grandfathered unlimited data plans.

AT&T’s forthcoming strategic redirection, to be announced Nov. 7, is likely to center around increasing revenue from the company’s wireless data network.

The average AT&T customer’s wireless broadband data bill is on the increase.

Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets, told investors it is taking “this massive data growth and building products and services on top of that.”

“One of the best examples I can give you is our launch of Digitize that will happen next year,” de la Vega said. “It leverages this huge smartphone database and adds services on top of it and not just data access, but services that differentiate us from the competition. So you’re talking about connecting the home with service automation and security monitoring. We’re talking about connecting your car with all kinds of entertainment services.”

That means AT&T sees its future revenue coming mostly from existing customers paying more.

“Those services are not dependent on adding more customers per se, but connecting more houses, connecting more cars and connecting more things that drive significant revenue streams with good margins for us,” de la Vega said. “In terms of what we see happening with others in the industry, I don’t think anything we have seen changes our plan. We’re going to execute [and] let others react to our plan, instead of us reacting to them.”

AT&T seemed unconcerned by competition in the current marketplace, especially from those offering cheaper plans. de la Vega predicted other carriers will come around to AT&T and Verizon’s way of thinking about mobile plan pricing.

“I think these mobile share plans are very compelling to customers,” de la Vega told investors. “And I think those that don’t put them in, in the industry will probably have to rethink down the road because I think the reception has been exceptional.”

John Stephens, AT&T’s chief financial officer, called AT&T’s data growth important, as long as those customers are on tiered data plans. With three-quarters of their customers buying “higher-priced plans,” AT&T can grow revenue by encouraging data usage that forces customers into ever-higher allowance plans that deliver revenue boosts indefinitely.

“I think some of the things driving our pricing and the price moves we made almost a year ago where we increased our data pricing are driving our revenue growth,” de la Vega admitted. “But we’re also seeing people sign up for more data. And the fact is, as you sell more smartphones or more tablets, people need more data. Usage-based data pricing means as usage goes up, we can see some of that lift also coming from additional average revenue per customer. So not only do we feel good where we are, but I feel really good about where we’re going, because you have to have that base of usage base in order to be able to monetize the data growth that we foresee in the future.”

AT&T continues to depend primarily on its wireless division for most of its revenue, but as growth slows, the demand for ever-increasing average revenue from each customer will have to come from increasing prices or finding new services to sell that customers want.

Applications that wireless carriers seek to monetize

Some other highlights:

• AT&T was questioned by Wall Street about its decision to voluntarily contribute a $9.5 billion preferred equity interest in AT&T Mobility into the Pension Plan Trust. Some analysts consider that amount unnecessary and above the amount required by law, despite the company’s assertion this would help protect the long-term health of AT&T’s pension fund. But some retirees note AT&T’s generosity benefits itself — the company’s contribution to the pension plan is invested entirely in AT&T’s wireless business;
• AT&T now has 7.4 million U-verse subscribers, driving wireline revenue growth to levels not seen in more than four years. But AT&T still only averages less than a 15% market share in the cities where U-verse is available, suggesting cable operators are maintaining their market dominance;
• AT&T’s new upgrade policy, which curtails early upgrades and imposes new upgrade fees, is having a dramatic impact on discouraging customers from upgrading their phones. That has kept AT&T’s upgrade rate at a steady 7%, even with the introduction of the wildly popular new iPhone. AT&T has effectively cut their subsidy costs and took a 28% increase in equipment revenue from new upgrade fees to the bank;
• Capital expenditures are on target at $13.8 billion, with more than half of that invested in the wireless business. Landlines and U-verse upgrades took a back seat.
• AT&T receives enough iPhones to activate 5,000-10,000 new iPhone customers a day and still that is insufficient to meet demand;

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/ATT Quarterly Earnings 10-24-12.flv[/flv]

AT&T’s Ralph de la Vega explores the company’s latest quarterly earnings, focused on its profitable wireless business.  (3 minutes)