Shares in AT&T rose by 4% in premarket trading on Wednesday after the telecommunications company reportedly grew its subscriber base for the second quarter. Five analysts polled by FactSet indicated that AT&T’s 419,000 new wireless phone subscribers, thereby vastly exceeding market expectations of 284,800 new subscribers for the quarter.
The rise in AT&T’s monthly bill-paying subscribers was largely driven by the company’s unlimited plans that are generally priced lower than those of its competitors, thereby appealing to budget-conscious consumers. Only 0.7% of AT&T’s customer base disconnected from their service in the second quarter; their second-lowest figure ever reported for a second quarter.
With a slowing rate of phone upgrades in the US, AT&T’s revenue was negatively affected. Mobility equipment revenue was $29.8 billion; an 8% decline while also falling short of expectations of $29.92 billion compiled by LSEG data. Free cash flow for AT&T rose by over 9% to $4.6 billion, thereby beating Wall Street expectations of a revenue of $4.22 billion.
Despite its overall positive financial trajectory, AT&T’s finances could be further negatively affected by fines related to a nationwide outage in February. The outage, which lasted for 12 hours, blocked over 92 million voice calls and over 25,000 emergency calls to 911.