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AT&T grows wireless business, but real winner is T-Mobile

An AT&T retail store.
An AT&T retail store. (Handout photo courtesy AT&T, Graphic by The Desk)

AT&T exceeded expectations from Wall Street analysts on Wednesday when it revealed its postpaid wireless business added 656,000 lines during its most-recent financial quarter.

The figure was higher than the 644,000 lines expected by a consensus of Wall Street analysts, suggesting the wireless market is showing signs of health despite economic uncertainty.

The period covered the retail holiday season, where wireless providers use aggressive promotions combining discounts, free devices and other perks in order to convince account holders to start a new line of service or add lines to an existing account.

This week, Verizon said it added 217,000 postpaid lines during its most-recent financial quarter; T-Mobile, which reports its earnings in early February, previously said it added over 927,000 lines during the same period, according to preliminary holiday sales results released earlier this month. (T-Mobile gave customers the option to add free lines of service to their accounts, even if they do not actively use them; some customers on Reddit say they have several free lines that are inactive on their accounts, simply because T-Mobile offered it to them.)

For the wireless companies, the growth of each postpaid business suggests consumers are returning to pre-pandemic levels of spending on wireless lines and associated services.

“Last year, we saw the normalization of the payment cycles back to pre-pandemic levels in terms of how quickly we collect,” Pascal Desrochest, the chief financial officer of AT&T, said on a conference call with investors and reporters on Wednesday. In other words, customers are paying their bills on time, instead of delaying payments due to tighter budgets.

That is particularly impressive, considering wireless companies have raised certain fees on customers over the last few years. T-Mobile — which, again, might be counting a lot of free lines toward its total of net line additions during the holiday quarter — adjusted its late fee for tardy account holders, with customers now paying $7 every time they miss a payment by its due date. AT&T raised fees on some legacy wireless plans — a move that the company said could lead to higher churn, though it suspected most customers would simply move to a different tier of service. Verizon has traditionally had some of the highest per-line fees in the industry.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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