AT&T Inc. (NYSE:T) exceeded Wall Street forecasts for first-quarter wireless subscriber additions and free cash flow on Wednesday, driven by increased adoption of its premium unlimited plans. The company’s stock rose by 2.4% in early trading following the announcement.
Employing its 5G deployments and cost-effective strategies relative to competitors like Verizon, AT&T has aimed to attract budget-conscious consumers and stimulate growth within the fiercely competitive U.S. telecommunications market. In the first quarter, AT&T saw a robust addition of 349,000 net monthly bill-paying wireless phone subscribers, outpacing expectations of 286,800 additions, as reported by five analysts polled by FactSet.
The expansion of AT&T’s fiber network contributed to a notable 7.7% increase in broadband revenue during the period. Pascal Desroches, AT&T’s finance chief, highlighted the cost efficiencies associated with the migration of customers from legacy services to fiber, citing fiber’s superior operating model, enhanced reliability, and superior service quality during a post-earnings call.
AT&T’s free cash flow surged to $3.1 billion, more than tripling estimates of $2.53 billion, according to Visible Alpha. However, total revenue fell slightly below LSEG expectations, reaching $30 billion, as the U.S. telecom market experienced subdued phone upgrade activity.
Despite this trend, AT&T has maintained relatively stable upgrade rates compared to rivals Verizon and T-Mobile, attributed to its focus on customer retention rather than aggressive acquisition strategies. Analysts at Morningstar noted last month that this approach resulted in AT&T achieving its lowest first-quarter churn rate, at 0.72%, for the three months ending in March.
Adjusted profit for the quarter stood at 55 cents per share, aligning with market expectations. Verizon, initiating earnings releases for the U.S. telecom sector earlier in the week, reported fewer subscriber losses for the quarter.
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Author Faith Yakubu 
