(Reuters) - AT&T Inc’s (T.N) quarterly revenue missed estimates due to lower equipment sales as customers held onto phones longer and rival wireless carriers offered new promotions on unlimited data plans, the No. 2 U.S. wireless carrier said on Tuesday.
It said it lost 191,000 postpaid subscribers, who pay bills monthly, in the United States on a net basis in the first quarter ended March 31.
AT&T and industry leader Verizon Communications Inc (VZ.N) are battling Sprint Corp (S.N) and T-Mobile US Inc (TMUS.O) for market share in a mature U.S. wireless market where most U.S. consumers already have cellphones. Verizon on Thursday reported its first-ever quarterly loss of subscribers.
Unlimited data plans are among the latest industry incentives. In February, Verizon joined other carriers in offering an unlimited data plan for the first time in over five years.
“Obviously, this has made an already competitive market even more so, and our response to the unlimited data plans was probably a little slow,” Chief Executive Randall Stephenson said on the company’s post-earnings conference call. He said the Dallas-based company had lost market share in the quarter.
AT&T and Verizon have also been buying up assets that they need for a next-generation, or 5G network, with faster downloads and applications that would enable self-driving cars.
Verizon has made an offer for Straight Path Communications Inc STRP.A, a source told Reuters, topping an earlier bid from AT&T in a move that started a bidding war for a company holding spectrum used in 5G technology.
On the call, AT&T reiterated that it had five business days to match or exceed the bid and that it would make a decision in that timeframe.
AT&T is trying to diversify by buying Time Warner Inc TWX.N in a $85.4 billion deal that would give it control of cable channels like HBO and CNN as well as film studio Warner Bros. AT&T has said the deal would close by the end of the year.
AT&T also acquired DirecTV for $48.5 billion in 2015, making it the largest U.S. pay-TV operator. In November, it introduced a streaming service called DirecTV Now for consumers looking for a cheaper alternative to bigger cable bundles. For the quarter, AT&T said that new DirecTV Now customers helped offset declines in linear television subscribers, which fell by 233,000.
AT&T’s total operating revenue fell nearly 3 percent to $39.37 billion, mainly due to record-low sales of wireless handset sales.
Net income attributable to AT&T was $3.47 billion, or 56 cents a share, down from $3.80 billion, or 61 cents a share, in the year-ago period.
Excluding items, earnings per share matched analysts’ consensus estimate of 74 cents according to Thomson Reuters I/B/E/S. Revenue was expected at $40.53 billion.
AT&T also said it would no longer give a full-year revenue forecast due to the unpredictability of wireless handset sales.
Additional reporting by Aishwarya Venugopal in Bengaluru; Editing by Savio D'Souza and Richard Chang