(Reuters) -AT&T gained more wireless subscribers than expected in the third quarter, driven by the steady adoption of its higher-tier unlimited plans that come with perks including increased hotspot data, sending its shares up 3.1% in premarket trading.
The U.S. telecom firm said on Wednesday it had added 403,000 net monthly bill-paying wireless phone subscribers in the July-September period, above Visible Alpha estimates of 393,430 additions.
Premium plans have helped AT&T (NYSE:T) stay competitive in the saturating U.S. telecom market where rivals Verizon (NYSE:VZ) and T-Mobile are bundling their offerings with streaming services such as Netflix (NASDAQ:NFLX) and Max to attract customers.
Demand has also been growing for AT&T's plans that allow customers to combine its high-speed fiber data with its wireless phone service for a discount. The company said 40% of customers that use fiber also opt for its wireless plans.
Postpaid phone churn, or the number of customers canceling AT&T's service monthly, was 0.78% in the third quarter, helped by the company's smartphone plans that offer new and existing customers the same promotions.
But revenue of $30.2 billion missed estimates of $30.44 billion, according to data compiled by LSEG, as the company's mobility equipment sales took a hit from lower phone upgrade volumes.
Rival Verizon also reported a quarterly revenue miss on Tuesday due to the lull in phone upgrades.
AT&T's fiber business added 226,000 customers, missing expectations of 257,860 additions, according to Visible Alpha. This was mainly driven by a work stoppage that began in August in its southeast region and impacted fiber installations.
Operating expenses rose 14% to $28.1 billion in the third quarter, compared with LSEG-compiled estimates of $22.31 billion. The rise in costs primarily stemmed from a $4.4 billion non-cash goodwill impairment charge associated with the business wireline unit, where customers are opting out of legacy services at a faster-than-expected pace.