AT&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 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.
AT&T also reaffirmed its free cash flow and adjusted profit forecasts for the year and said it planned to commence share repurchases in the second quarter.
Rival Verizon 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.