AT&T Wireless Services Inc., the nation's third-largest wireless operator, Tuesday posted a fourth-quarter net loss as it added subscribers at the low end of its target and average revenues per customer dropped 8 percent.

The fourth-quarter net loss totaled $1.2 billion, or 48 cents a share, compared with income of $411 million, or 15 cents a share a year ago.

Its loss from continuing operations was $355 million, or 14 cents a share, compared with income $488 million, or 18 cents a share a year ago. Analysts on average were expecting a loss of 6 cents according to Thomson Financial/First Call with loss estimates ranging from 2 cents to 10 cents.

AT&T Wireless had warned in October that earnings would be sequentially lower in the fourth quarter because third quarter results were boosted by a one-time income tax benefit. The company had a profit of $77 million, or 3 cents a share, in the third quarter.

AT&T Wireless added 927,000 subscribers in the quarter, at the low end of its targeted range of 900,000 to 1 million. It ended the quarter with 18.0 million customers, a 19 percent increase from the prior year.

AT&T's weak subscriber additions confirmed fears that the industry was slowing down as a result of the economy and a higher penetration rate. As more people own cell phones, it becomes more difficult to add each new customer.

For 2002, the company expects its subscriber growth rate, on a consolidated basis, and service revenue growth to be in the low teens.

Customer turnover, or churn, was 2.7 percent, a 20-basis point improvement from the year-ago quarter and a 40-basis point improvement from the third quarter of 2001. A basis point is one-one hundredth of a percent.

The Redmond, Washington-based company said total consolidated revenues grew 18.7 percent to $3.528 billion. Services revenue for the mobility business, which sells cell phone service, increased 23.1 percent to $3.241 billion in the fourth quarter compared to $2.634 billion for the year-ago quarter.

Service revenues were helped by to continued subscriber growth and increased usage, partially offset by lower average revenue per user, which fell 8 percent to $60.80.

AT&T Wireless mobility EBITDA, or earnings before interest, taxes, depreciation and amortization, for the fourth quarter jumped 74.9 percent to $666 million. The company said it had higher network costs driven by increased customer usage, as well as slightly higher customer acquisition, customer care and billing costs. For 2002, it said EBITDA growth is expected to be in the low 30 percent range.

Shares of AT&T Wireless closed at $11.75 on the New York Stock Exchange on Monday. The stock has underperformed the Philadelphia Stock Exchange's wireless telecommunications index by about 6 percent over the past year.