AT&T Inc (NYSE:T, ETR:SOBA) shares are set to open more than 3.5% higher on Wednesday after it exceeded market expectations for wireless subscriber additions in the second quarter.
The telecom giant saw its monthly bill-paying wireless phone subscribers jump by 419,000 during the three months, compared with expectations of 284,800 additions.
This increase was driven by the company's higher-tier unlimited plans, which attracted budget-conscious customers amid tough competition from T-Mobile and Verizon.
It means that AT&T has been able to hold onto customers better, with the group revealing a postpaid phone churn rate of 0.70%, the second lowest reported for a second quarter.
Free cash flow rose more than 9% to $4.60 billion, beating Wall Street estimates of US$4.22 billion.
However, slower phone upgrades in the U.S. impacted AT&T's revenue, with total revenue of US$29.8 billion missing the US$29.92 billion estimate.
Additionally, mobility equipment revenue was down 8% in the April-June period.
AT&T faced challenges with data breaches and significant outages this year.
The U.S. Federal Communications Commission reported that a nationwide outage in February blocked more than 92 million voice calls and prevented more than 25,000 attempts to reach 911, which could potentially result in a fine for the company.