AT&T beats wireless subscriber targets as bundle strategy lifts growth
Competition for a limited pool of U.S. telecom customers is pushing providers to deepen household relationships through combined service offers. AT&T says its lower-cost unlimited plans and mobile-broadband bundles help drive stronger-than-expected wireless additions in the second quarter while also supporting broadband growth.
Highlights
- AT&T adds 432,000 net postpaid wireless subscribers in Q2, exceeding FactSet estimates of 338,500, lifting shares 5% in premarket trading.
- Adjusted EPS reaches 65 cents versus 59-cent analyst consensus, with total revenue at $31.6 billion compared to expectations of $31.80 billion.
- Bundled offerings, including OneConnect and expanded fiber, drive record broadband growth with 367,000 new fiber users and 279,000 fixed wireless subscribers.
Second-quarter subscriber gains and earnings
As reported by Reuters, AT&T adds 432,000 net monthly bill-paying wireless subscribers in the April-to-June period, well above FactSet estimates of 338,500 additions. The performance helps lift the company's shares 5% in premarket trading on Wednesday.Adjusted earnings per share come in at 65 cents, ahead of analysts' average estimate of 59 cents. Total revenue stands at $31.6 billion, compared with estimates of $31.80 billion, according to data compiled by LSEG.
Bundle offers strengthen household reach
AT&T's gains build on its convergence strategy of selling multiple connectivity services to the same household to reduce churn and raise customer lifetime value. In March, the company launches OneConnect, a single subscription combining unlimited wireless service with home internet on one monthly bill.The company also rolls out customizable Build-A-Plan options and new entry-level wireless plans with more high-speed data, while continuing to invest in fiber network expansion. Its bundled offers help deliver record broadband additions, including 367,000 new fiber internet users and 279,000 fixed wireless subscribers, while about 42.5% of homes using AT&T's advanced internet services also subscribe to its wireless service.
In our earlier coverage of the market’s rebound led by chip stocks, we noted that investors were closely watching AT&T’s upcoming earnings as a key catalyst for the next session. We also highlighted how sharp moves in semiconductor names were reshaping positioning and volatility expectations, even as several major stocks remained well below recent highs.
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