AT&T released their second quarter earnings this morning, the numbers bolstered by the launch of the iPhone 3GS. AT&T says more than 2.4 million iPhones were activated in the quarter, with more than a third of those new customers. Despite all of the recent complaints about AT&T wireless service, AT&T's already low churn (customer defection) rate dropped even further to 1.09 percent.

Users have been hard on AT&T lately for a litany of issues. Delays in MMS functionality and iPhone tethering, the carrier's tendency to cripple high-bandwidth applications, continued complaints of poor 3G network performance in some cities and most recently visual voicemail outages -- have solidified AT&T's reputation as the weak link in the AT&T and Apple super union.

AT&T recently insisted to us that they are listening to user complaints, and CEO Randall Stephenson issued a statement today saying that upgrades to 7.2Mbps HSPA is "under way." But AT&T's speed at fixing certain issues (like congestion in NYC) has felt glacial. Techcrunch went so far as to recently call AT&T a "Big, Steaming Heap of Failure."

But for all the complaints about the carrier's missteps, AT&T's coffers don't seem to be feeling a thing. Including both SMS and Internet access, the carrier not only saw lower turnover, but a 37.2 percent increase in wireless data revenues on the quarter. AT&T's net income did drop from $3.8 billion to $3.2 billion, though that was largely due to landline defections, and money owed Apple they'll make up on long-term customer contracts.

In other words, for all the complaints -- consumers aren't voting with their wallets and defecting in any great volume. Of course many of them are under long-term contract and/or willing to suffer through AT&T's problems to retain the iPhone, which is why AT&T's working very hard to extend their exclusive distribution agreement with Apple that ends next year. If AT&T can't extend that contract, the check for poor service will come due.

As for more terrestrial affairs, AT&T says they added 248,000 new U-Verse customers, bringing the grand total to 1.6 million VDSL lines in service. AT&T actually slowed deployment of their "next-gen" broadband upgrade this year. While that's not a particularly good call given Comcast's rabid expansion of DOCSIS 3.0 speeds, AT&T does appear to be a little closer to VDSL2 line bonding, which will improve both U-Verse speed and reach.