AT&T CFO Reports Fewer Wireless Customer Defections In 'The Most Competitive Environment We've Ever Seen'

Partners looking for recurring revenue have another big reason to consider AT&T as the carrier seems to be improving its ability to hang onto wireless customers. AT&T touted its "tremendous" success in stemming customer defections during the carrier's Q2 2017 earnings call.

According to AT&T, postpaid wireless customer churn was 0.79 percent during Q2 2017, the lowest in the company's history.

The carrier's "best ever" rate of postpaid wireless churn included 2.8 million net adds during Q2 2017. According to AT&T, 2.3 million adds came from the U.S. and were driven by connected devices and prepaid and postpaid adds. The growth in the wireless segment blew past Wall Street's expectations of 1.08 million net adds.

[Related: AT&T NetBond Helps Partners Get Customers To The Cloud, Adds Oracle And AWS On-Ramps]

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AT&T in June revealed an unlimited wireless plan bundled with its internet streaming service DirecTV for an additional $10 a month. It's bundles like this that are helping the carrier attract new – and hold onto – existing customers in the "the most competitive environment we've ever seen," John Stephens, AT&T's senior executive vice president and CFO said.

"Our focus was on giving customers a great video entertainment experience, bundled with mobility," Stephens said. "Our results speak for themselves."

AT&T also netted 2.7 million wireless adds during the first quarter of the year, which the carrier said primarily came from prepaid users and connected devices.

AT&T's Business Solutions revenues continued its modest decline this year, slumping from $17.58 billion in Q2 2016 to $17.11 billion in Q2 2017, succumbing to the pressure of legacy wireline losses.

Partner Solutions revenues also declined slightly during Q2 2017, which ended June 30, from $1.52 billion in Q2 2016, down to $1.49 billion during Q2 2017.

However, the carrier's strategic services revenues, which include Ethernet, cloud, VoIP and security services, climbed from $2.81 billion in Q2 2016 to $3.03 billion during Q2 2017.

Business wireless revenues were down slightly year over year to $9.73 billion in the quarter from $9.74 billion a year ago, feeling the pinch of lower wireless equipment revenues, Stephens said.

Despite, the "tough enterprise environment," Stephens expects a pickup in business services revenues during the second half of 2017, he said.

AT&T also took time during its earnings call to address the status of its plans to acquire media giant Time Warner for $85.43 billion, which the carrier first announced in 2016. The company expects the deal, which will allow it to bundle its mobile service with entertainment, will close by the end of 2017.

On Monday, Bloomberg reported that the U.S. Justice Department is in early-stage discussions with AT&T on possible conditions that could be placed on the combined company that would help remedy anti-competition concerns and ultimately secure the approval of the $85.4 billion deal. Stephens said that AT&T has the financing necessary for the deal to close, and its merger and integration team already has plans in place for advertising and bundling.

"Our goal is to hit the ground running once we receive final approval, and build our leadership in the telecom, media, and technology space," Stephens said.

AT&T reported diluted earnings of $0.63 per share on revenues of $39.84 billion, down slightly from $0.55 per share and $40.52 billion in the year-ago quarter. The carrier attributed these drops to declining legacy wireline and consumer mobility. Despite the decline, AT&T's earnings beat Wall Street's revenue estimate of $39.79 billion.

Operating expenses fell to $32.5 billion in Q2 2017 from $34 billion in Q2 2016. Net income attributable to AT&T during the quarter was $3.92 billion, up from $3.41 billion during Q2 2016.