AT&T has unveiled their third quarter earnings, which among other things indicate the company added the most iPhones ever in a single quarter. According to AT&T, they activated 3.2 million iPhones during the third quarter, with forty percent of those customers new to AT&T. The data suggests that despite AT&T's network headaches, the lure of the device is simply too great for many to resist. iPhones represented 74% of the 4.3 million postpaid, integrated devices activated by AT&T last quarter as AT&T tries to extend their exclusive distribution arrangement with Apple.

More shiny new iPhones means more people paying $30 a month for data (whether they use that much data or not), and AT&T's wireless data revenues jumped 34% from last year's, to $3.6 billion. AT&T continues to see huge subscriber additions in wireless. The company added 2 million new subscribers to bring their wireless subscriber total to 81.6 million. Once lured in by the iPhone, many customers stay because of the iPhone (and long term contract ETF penalties), as AT&T continues to have the lowest customer defection rate in the industry.

On the U-Verse front, AT&T says they added 240,000 net U-verse customers, bringing their installed total U-Verse customer base to 1.8 million. According to AT&T, 90% of customers who order U-Verse TV also get broadband service. 60% of customers who order U-Verse TV also sign up for U-Verse VoIP service.

Of course AT&T's problem isn't wireless or U-Verse, it's their continued losses in traditional landline service. Landline revenues continued to drop, falling 7.1% to $16.3 billion from $17.6 billion one year ago. Those landline reductions will likely mean additional layoffs, according to engineers speaking anonymously to Broadband Reports. "A significant workforce reduction is coming and will be finalized by end of October," says one source, who says specific layoff numbers have not yet been revealed.

In the summer of 2008 we noted that AT&T was no longer taking new orders for their Callvantage VoIP service. The company of course wanted to begin pushing their U-Verse Voice VoIP product a little harder, but employees also hinted to us that AT&T was cooking up a new bring your own broadband (BYOB) VoIP offering as well. That BYOB service still hasn't arrived, but AT&T this week gave a concrete date for the CallVantange shutdown, which previously was vaguely scheduled for sometime this year. According to an e-mail being sent to customers this week, CallVantage will officially be shuttered on Novermber 17. Hopefully, the seven of you still using AT&T's CallVantage service find this information useful.

For years, AT&T has been fighting with the state of Connecticut over whether U-Verse should adhere to cable regulations, the placement of AT&T U-Verse VRADs, and AT&T's customer service record in the state. More recently, Connecticut Attorney General Richard Blumenthal has taken aim at excessive executive compensation, requiring AT&T, Verizon and every other public utility to report executive salaries on a yearly basis. He's also complaining about layoffs in the face of poor customer service, and renewed those complaints this week: story continues..

As phone companies move into the fourth quarter, they're unveiling their new bundle promotions in their fight against cable operators. Verizon this week offered up several new promotions that include a $150 gift card rebate and free installation for FiOS customers, or three months of free DSL for new customers. AT&T also this week announced their "talk, text and surf" plan (albeit only to customers in former BellSouth markets), offers 1.5 Mbps DSL, unlimited landline service, 450 minutes of wireless calling and unlimited messaging for $99 per month. Says AT&T:For a company that said forcing customers to bundle landline service in order to get discounts was lame by 2007 standards, AT&T sure likes to force customers to bundle landline service in order to get discounts. 1.5 Mbps DSL in 2009 is also starting to show its age as carriers begin pushing toward 50 and 100 Mbps. Are these fourth quarter telco DSL deals interesting to any of our readers? Enough to keep you from going to faster cable broadband options?

AT&T, Comcast and Verizon all came under fire recently for suggesting the baseline definition of broadband should remain low (as in, between 200-768 kbps), given that means they'd have less work to do -- and less government oversight into their affairs. AT&T's comments to the FCC (pdf) went one step further, arguing that video gaming should not be considered an essential component (like e-mail and browsing) when discussing broadband definitions, and is instead an "aspirational" service. Says AT&T:The gaming industry subsequently got offended, issuing their own filing with the FCC that of course argued that gaming was not only the highest of art forms, but a necessary educational tool: story continues..