AT&T Beats Subscriber Forecasts as iPhone Deals and Bundled Plans Boost Growth
AT&T added more new wireless customers than expected in the third quarter, lifted by bundled service discounts and aggressive iPhone 17 promotions that helped it compete in a crowded U.S. telecom market. However, the company’s shares fell about 2% on Wednesday after slightly missing revenue estimates due to weaker equipment sales.
The September quarter is a key period for wireless carriers, coinciding with Apple’s annual iPhone release, when firms battle fiercely to win subscribers. AT&T rolled out generous trade-in offers and upgrade incentives to draw new users and push existing ones toward higher-tier plans.
The company reported 405,000 new postpaid wireless subscribers, surpassing FactSet’s estimate of 334,100, while equipment revenue from its mobility division rose 6.1% to $4.79 billion, slightly below Visible Alpha’s forecast of $4.93 billion. Operating costs climbed 3.8%, driven by pricier phones and heavier marketing expenses.
Analysts said the fourth quarter could see an even sharper rise in customer upgrades during the holiday season, pressuring profit margins. MoffettNathanson noted that “a normalization of upgrade rates” could increase churn and reduce average revenue per user (ARPU).
To retain customers, AT&T has leaned on its bundled fiber and wireless offerings, offering discounts to multi-service subscribers. The strategy is paying off: over 41% of AT&T’s fiber broadband customers now also use its mobile service, and broadband net additions of 558,000 marked the company’s best performance in over eight years.
Still, revenue from AT&T’s business wireline unit fell 7.8%, reflecting ongoing declines in legacy voice and data products.
On an adjusted basis, the company earned $0.54 per share, matching analyst expectations. Total revenue came in at $30.7 billion, just shy of the $30.87 billion forecast.
While the results highlight AT&T’s subscriber momentum, analysts warn that the coming upgrade surge could test the sustainability of its current growth strategy.