Key insights
- AT&T exceeded expectations for wireless subscriber additions and revenue, driven by bundling strategies and growth in 5G and fiber services. The company's adjusted profit also beat estimates. While positive for AT&T, the broader market impact is limited, suggesting a slightly positive signal for the telecommunications sector.
April 22 (Reuters) - AT&T added 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.
Shares of the company were up 1% in premarket trading on Wednesday.
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 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 while trimming prices in the middle, a move analysts said is designed to steer customers toward mid-range plans rather than spark a price war.
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 first 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.
AT&T reported adjusted profit of 57 cents per share in the quarter, above expectations of 55 cents.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Anil D'Silva)