Dallas-based AT&T Inc. added far more mobile-phone subscribers than Wall Street expected in the second quarter, with fewer customers canceling and many adding wireless service to their broadband plans.
The No. 3 US wireless provider reported a net 419,000 new monthly phone subscribers, according to a statement Wednesday. That marks the first year-over year increase in eight quarters. Analysts were expecting 279,000, according to data compiled by Bloomberg. The shares rose 2.6% in premarket trading in New York on Wednesday.
Churn, or the number of customers canceling their service monthly, fell to 0.7%, the company said, reflecting a marketing initiative that offers new and existing customers the same promotions. AT&T said almost 40% of its high-speed fiber customers also signed up for wireless phone service.
“Customers increasingly seek one provider who can seamlessly connect them in their home, at work and on the go,” Chief Executive Officer John Stankey said.
Verizon, the No. 1 wireless company in the US, reported earlier this week that it added 148,000 monthly wireless phone customers in the second quarter, also beating estimates.
AT&T reported 239,000 fiber broadband net additions in the quarter, missing analysts’ estimates for 253,000, in a typically slow period for new internet signups. The Affordable Connectivity Program, which provided low-income households with a $30 monthly discount toward home internet service, expired in June.
Like its peers, AT&T is focusing on winning subscribers to its fixed wireless service, which sends signals to a device in a home or business over airwaves, rather than a fixed line. The company added 139,000 of those customers in the period. The technology has accounted for nearly all of the recent broadband subscriber gains across the industry and is wreaking havoc on cable companies that are losing customers.
Total revenue was $29.8 billion, little changed from a year ago, and slightly lower than analysts’ estimates of $30 billion. Adjusted earnings before interest, taxes, depreciation and amortization were $11.3 billion, in line with estimates. Adjusted earnings per share totaled 57 cents, also meeting expectations.
AT&T has suffered a rash of public embarrassments this year. The telecommunications giant made headlines two weeks ago when it disclosed a massive cybersecurity breach in which a hacker stole sensitive call and text data of nearly all of its mobile-phone customers over a six month period in 2022. The breach prompted an investigation by the Federal Communications Commission. A hacker claimed to have been paid about $400,000 to erase the data, Bloomberg reported, though AT&T declined to comment on whether it paid a ransom.
The company suffered a widespread outage of its wireless network in February and a security breach disclosed March 30, in which data from about 73 million current and former customers leaked onto the dark web.
AT&T shares have gained 8.5% this year, compared with 10% for T-Mobile US Inc. and 3.2% for Verizon Communications Inc. Shares of Verizon fell Monday after it released earnings.
- Brandon Mioduszewski for Bloomberg
