AT&T: Expanding Fiber Network Helps Gain, Retain Mobile Phone Subscribers

AT&T is finding that by offering both mobility and broadband services, it’s gaining and retaining more customers.

The company added 419,000 postpaid phone subscribers during the second quarter, up from 326,000 during the same quarter a year earlier, executives said Wednesday (July 24) during the company’s quarterly earnings call.

“This put us modestly ahead of last year’s pace despite ongoing wireless market normalization,” John Stankey, president, CEO and director of AT&T, said during the call.

The company’s addition of 419,000 postpaid phone subscribers exceeded analysts’ expectations. Analysts polled by FactSet expected 284,800 additions, Reuters reported Wednesday.

Stankey attributed the growth in part to the company’s investment in fiber.

“We believe the success of our fiber business is driving growth in mobility and vice versa as consumers increasingly prefer to purchase mobility and broadband together as a converged service,” Stankey said during the call. “For example, today, nearly 4 out of every 10 AT&T fiber households also choose AT&T as their wireless provider.”

During the quarter, AT&T had postpaid phone churn of 0.70%, down from 0.79% a year earlier, according to a presentation released Wednesday. The company said in a Wednesday earnings release that it expects that to be a figure that leads the industry.

“Our combined customers are happier customers,” Stankey said during the call. “They have lower churn and they have longer lifetime values.”

He added that the convergence of mobility and broadband “is a good way to make money and it’s a good way to keep customers in the fold.”

Reuters reported Wednesday that AT&T’s growth in subscribers was also helped by the fact that its unlimited plans are usually priced lower than those of its rivals, and that the company’s lower churn was aided by its strategy of offering the same deals on smartphones to both new and existing customers.

Asked by an analyst about network outages and data breaches that have occurred over the past year, Stankey said AT&T is making changes to adapt to “an incredibly dynamic environment.”

“The threat environment we’re in is a really difficult environment and it’s going to get probably more difficult,” Stankey said during the call. “Some of the geopolitical dynamics that are going on are putting pressure on that. Good companies just like ours are all having to learn some new things and are seeing new threats and new environments that they have to adjust to.”

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