AT&T activated 8.6 million iPhone users in the fourth quarter, 16% of which emanated from new subscribers, out of the 10.2 million smartphone additions the carrier had previously announced. The telecom said Thursday it gained 780,000 contract subscribers, while wireless service revenues rose by 4.2% from a year ago and wireless data sales soared by 14.7%. Churn fell slightly to 1.19%. Profit margins took a hit from smartphone sales due to subsidizing the price to consumers as well as expenses related to Hurricane Sandy. Overall, AT&T lost roughly $3.9 billion, a 42% improvement from 2011, which included a $10 billion charge on retirement-related costs.