Telecom giant AT&T is battling to retain customers amid fierce competition, unveiling a revamped strategy to combat subscriber losses. The company’s latest earnings report reveals a concerning rise in customer churn, prompting a decisive shift in approach.
In the first quarter of 2026, AT&T experienced a rise in postpaid phone churn, reaching 0.89% compared to 0.83% in the same period last year. The prepaid phone business also saw an increase, climbing to 2.62% from 2.55%.
This increase in churn reflects a broader trend, with consumers increasingly opting for more affordable alternatives to traditional carriers. Mobile virtual network operators (MVNOs) and cable companies offering bundled packages are gaining traction, while satellite mobile services like Starlink are also emerging as viable options.
A recent survey indicated that a substantial percentage of customers from major carriers, including AT&T, have faced bill increases in the past year. Consequently, a significant portion are contemplating switching providers, with AT&T potentially at risk of losing a considerable number of subscribers due to pricing concerns.
Past actions, such as restricting autopay discounts and implementing price increases for legacy plans, have further fuelled customer dissatisfaction and contributed to the churn rate.
However, AT&T’s CEO, John Stankey, remains optimistic, asserting that the company’s new strategy is specifically designed to address the churn issue.
During a recent earnings call, Stankey highlighted the addition of 294,000 postpaid phone net subscribers in the first quarter, despite the overall churn challenges. He emphasised the company’s focus on converged phone and internet services as a key tool for attracting and retaining customers.
"The most effective way to manage churn is to converge customers," Stankey stated. He believes that as the industry realigns and customers gravitate towards value-driven options, the churn dynamic will naturally improve.
AT&T has significantly expanded its converged offerings over the past year, directly competing with cable providers. This strategic move aligns with the company’s ambitious plan to extend its fibre internet footprint by 5 million locations annually until the end of the decade.
| Metric | Q1 2025 | Q1 2026 |
|---|---|---|
| Postpaid Phone Churn (%) | 0.83 | 0.89 |
| Prepaid Phone Churn (%) | 2.55 | 2.62 |
