AT&T adds more wireless subscribers than expected as bundling pays off

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.

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.

Shares of the company fell about 3% after the company forecast ‌second-quarter free ⁠cash flow of $4 billion to $4.5 billion, compared with analysts’ estimate of $4.6 billion, according to Visible Alpha.

“You could have a little bit better free cash flow performance there if they wanted to, but clearly they feel like data is going to ​be the revenue of ​the future. And ⁠that’s why they’re investing so heavily in it,” said Brian Mulberry, chief market strategist at Zacks Investment Management.

Telecom providers like AT&T ​and Verizon are pouring billions into technology and fiber network ​upgrades to ⁠remain competitive amid a sharp rise in data consumption.

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. Reuters