While the market was bracing for the worst, telecom giant AT&T (NYSE: T) soothed some nerves with a solid earnings report yesterday. America's iconic communications company broke new records in its wireless business and cited improved growth in broadband and enterprise services.

AT&T reported fourth-quarter revenue of $30.4 billion, which is up 3% from last year when compared with consolidated results from the mergers of BellSouth and Cingular Wireless. The bottom line swelled to $3.1 billion, or $0.51 per share, after taking into account merger costs that sapped $0.19 per share in the quarter.

The wireless business continued to shine this quarter, as AT&T stomped on rivals Sprint Nextel (NYSE: S), Verizon Wireless -- a joint venture between Verizon Communications (NYSE: VZ) and Vodafone (NYSE: VOD) -- and Deutsche Telekom's (NYSE: DT) T-Mobile, with a record 2.7 million net subscriber additions in the quarter. Apple's (Nasdaq: AAPL) iPhone was a significant boost here, and the carrier noted that it now services about 2 million iPhone subscribers. With about 40% of these subscribers coming from other carriers, the company is happily picking the pockets of its competition.

Other wireless metrics fared well, too -- churn came in at 1.7%, while ARPU bumped up nearly 2% to $50.28. AT&T also now has its U-verse broadband video offering deployed to 231,000 customers and believes it is on track for its goal of 1 million-plus subscribers by the end of 2008.

Along with the progress on the U-verse buildout, recent news that the company will give free Wi-Fi hotspot access to all broadband customers marks a significant effort to jump ahead of competition. AT&T wants to offer complete, bundled service packages that include video and television services, to compete with cable concerns such as Comcast (Nasdaq: CMCSA).

So after CEO Randall Stephenson fanned fears a few weeks ago when he alluded to some impact from a softening consumer market, investors digested yesterday's results and breathed a little easier after finding that the sky wasn't really falling after all. With AT&T reiterating its 2008 growth targets, investors may want to consider that the economy really isn't as bad off as many (including Ben Bernanke) are saying.

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Fool contributor Dave Mock can keep a calm demeanor going for long periods as long as pixie sticks aren't involved. He owns no shares of companies mentioned here. He is the author of The Qualcomm Equation. The Fool's disclosure policy keeps a little black book full of celebrity numbers.