AT&T leans on bundled plans to beat estimates for subscriber additions
By Harshita Mary Varghese
(Reuters) - AT&T (NYSE:T) beat Wall Street estimates for wireless subscriber additions in the first quarter on Wednesday, driven by steady demand for its plans that bundled high-speed fiber services and 5G mobile offerings.
The U.S. wireless carrier’s focus on bundling to fend off intense competition in a saturating market and aggressive trade-in offers helped it gain 324,000 net monthly bill-paying wireless phone subscribers.
That compared with FactSet estimates of 258,300 additions for the quarter.
After flagging elevated rate of subscribers leaving its service in January, AT&T ramped up its deals with promotions for the latest iPhones to include trade-ins of models in any condition.
Device upgrades have "trended higher than expected" since the announcement of reciprocal tariffs in early April, AT&T CFO Pascal Desroches said, adding a continuation could lead to a pull forward in demand from the second half of the year.
Telecom (BCBA:TECO2m) companies typically experience higher upgrade rates in the second half of the year, largely aligning with the launch of new iPhone models.
AT&T’s shares gave up premarket gains and traded largely flat.
Total revenue rose 2% to $30.6 billion in the first quarter, compared with analysts’ estimate of $30.35 billion, according to LSEG data.
More than 40% of AT&T customers who use fiber also opted for wireless plans, the company said.
"We think that AT&T will continue to grow its subscribers and benefit from customers upgrading to higher-value wireless plans," said Dave Heger, senior communications services analyst at Edward Jones.
The company has attracted subscribers with the January launch of AT&T Guarantee, a policy of offering bill credits for any disruption on its network.
Rival Verizon (NYSE:VZ) on Tuesday posted higher subscriber losses in the first quarter, hurt by a fallout of recent price hikes and higher industry-wide promotions. T-Mobile is scheduled to report on Thursday after markets close.
