AT&T outperformed expectations for wireless subscriber growth in the third quarter, fueled by strong demand for its premium unlimited plans, which offer added benefits like increased hotspot data. This positive momentum boosted the company's shares by 3.1% in premarket trading.
The U.S. telecom giant reported an addition of 403,000 net monthly bill-paying wireless subscribers during the July-September period, surpassing analyst estimates from Visible Alpha, which forecast 393,430 additions.
AT&T’s focus on premium plans has helped it remain competitive in the highly saturated U.S. telecom market, where rivals like Verizon and T-Mobile are bundling services with popular streaming platforms like Netflix and Max to attract customers.
Moreover, AT&T has seen rising demand for bundled plans that combine its high-speed fiber internet service with wireless phone options at a discounted rate. The company revealed that 40% of its fiber customers also subscribe to its wireless services.
Customer loyalty also remained strong, as AT&T’s postpaid phone churn rate — the percentage of customers discontinuing service — was 0.78% for the quarter. This was bolstered by the company's smartphone plans, which offer consistent promotions to both new and existing customers.
However, AT&T's revenue for the quarter fell slightly below expectations, coming in at $30.2 billion compared to analyst projections of $30.44 billion, according to LSEG data. The shortfall was partly due to weaker sales of mobility equipment, as fewer customers opted to upgrade their phones.
AT&T’s fiber business added 226,000 new subscribers, falling short of the anticipated 257,860 additions. This was primarily impacted by a work stoppage in the company’s southeastern region, which began in August and slowed fiber installations.
Operating expenses surged by 14% to $28.1 billion, exceeding the $22.31 billion estimate compiled by LSEG. A significant portion of the increased costs was driven by a $4.4 billion non-cash goodwill impairment charge related to AT&T’s business wireline unit, where customers have been moving away from legacy services faster than expected.