AT&T adds more wireless subscribers than expected as bundling pays off
A pedestrian walks in front of an AT&T location in New York.
Scott Mlyn | CNBC
AT&T gained more wireless subscribers than expected in the first quarter, benefiting from customers opting for the telecom provider’s packages bundling wireless and high-speed fiber services.
In a highly competitive market, network providers have extended device subsidies, added plan discounts and increased investments in network infrastructure to attract and retain customers.
About 42% of AT&T households that use home internet services also opted for wireless plans – a convergence dynamic that analysts had flagged as a key differentiator.
AT&T, like rival T-Mobile, extended device subsidies into the first quarter for Apple’s latest iPhone models as carriers competed aggressively to lure customers with lucrative offers.
The company said on Wednesday it added 294,000 net monthly bill-paying wireless phone subscribers in the first quarter, compared with additions of 272,000 expected by analysts polled by FactSet.
AT&T raised prices on its lowest and highest wireless tiers to push customers toward mid-range plans and lift average revenue per user, while easing market fears of a price war.
Analysts say the move is aimed at nudging customers up the pricing curve rather than cutting prices to chase growth. Total revenue for the quarter grew about 3% to $31.5 billion, compared with estimates of $31.25 billion, according to data compiled by LSEG.
Starting this quarter, AT&T is reorganizing its business segments to highlight its core growth areas.
The new advanced connectivity segment, covering domestic 5G and fiber services, reported about 5% growth in revenue thanks to higher wireless device sales volumes and impact from the acquired mass markets fiber business from Lumen.
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