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Despite the Coronavirus pandemicAT & T's wireless business is thriving. In its earnings report for the third quarter on Thursday, the company reported strong growth in cellular and streaming video subscribers for the three-month period.
The company exceeded analysts' expectations with revenues of $ 42.3 billion for the third quarter ended September 30th. Analysts had expected sales of 41.6 billion US dollars, according to Yahoo Finance.
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In total, AT&T added 645,000 new monthly phone subscribers in the quarter. These so-called postpaid customers are important because they are considered to be the most valuable customers. Tracking their growth is often a signal of the health of the cellular business.
John Stankey, CEO of AT&T, said postpaid wireless growth was "the strongest in years".
The company also reported that the churn rate, or the rate at which people leave their service, for phone customers was 0.69% for the quarter, the best churn rate the company has ever reported.
Speaking to investors and analysts, Stankey attributed AT & T's success in wireless to the investments the company has made in recent years to build and maintain the company FirstNet wireless networkNot only does this provide nationwide access to first responders, it also serves as the foundation for AT & T's wireless service.
"This higher quality network has eliminated a reason for customers to leave because they are satisfied with the service they receive," he said.
He explained that when the COVID-19 pandemic hit and people were forced to stay in their homes while they sought refuge, much of the use on the network was distributed to suburban markets rather than urban centers. Stankey said the company's strong position in the low-band spectrum, which allows signals to travel over greater distances and provide better coverage at home, has helped customers stay connected while they are at home work and access the school remotely.
The large growth in new phone subscribers put AT&T ahead of rival Verizon, which reported profits on Wednesday. Verizon added 283,000 new postpaid subscribers during the quarter.
The quarter ended two weeks earlier Apple introduced its iPhone 12 series. Some models of the phone will go on sale starting Friday. IPhone 12 is the first iPhone to offer 5G, the next generation of wireless technology that increases download speeds and makes networks more responsive. AT&T and its competitors have expanded their 5G services.
See also: iPhone 12 Review: One of our Top Rated Phones of All Time
According to Stankey, customers old and new can expect AT&T to offer promotions with the introduction of the new device. He said iPhone promotions and other promotions the company is running are important because they're part of the equation for retaining valuable customers.
"We have an incredibly valuable customer base," he said. "It is our most important asset that we need to focus on."
Much of AT & T's cellular customer growth came from offerings that bundled the streaming HBO Max service with new phones. AT&T announced that the quarter closed with 38 million US subscribers for its HBO and HBO Max services. It had 57 million subscribers to these services worldwide.
But not all news for AT&T has been rosy. The company said it continues to feel the effects of the COVID-19 pandemic. The biggest impact was the Warner Media business, which had to cease production and is still affected by the closure of cinemas. The company estimates it cost the company $ 1.6 billion in revenue in the third quarter.
Things are starting to accelerate. Sports broadcasts resumed in the quarter. Although the company's media unit is attracting new subscribers, it is also losing existing HBO cable television subscribers as customers cut the cable. AT&T has tried to expand its streaming services but is still catching up with rivals Netflix and Disney Plus.
AT&T announced that it added 357,000 new fiber Internet customers in the quarter. This was due to increased demand for internet access as more Americans work from home during the pandemic.
AT & T's stock rose 6.38 percent to $ 28.42 per share in midday trading.