Updated version 2 - Due to the impact of bundled package discounts, AT&T’s fiber revenue per user will continue to decline.

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Harshita Mary Varghese

Reuters, October 21 - AT&T T.N anticipates that the average revenue per fiber user will continue its third-quarter decline in the fourth quarter, as more customers opt for discounted plans. This indicates that AT&T's user growth strategy is coming at the expense of average revenue per user.

On Wednesday, the company’s shares fell 6.5%, while rivals T-Mobile TMUS.O and Verizon VZ.N also saw their stocks drop by about 3%.

Bundling broadband packages with wireless services and offering steep discounts is seen as a key move by U.S. telecom operators to attract and retain customers in a fiercely competitive market.

Approximately 43% of households subscribing to AT&T internet services also choose its wireless plans.

CEO John Stankey said AT&T “has good reason to believe that converged fiber customers will be highly sticky and have high lifetime value.”

As the industry worries that SpaceX’s plans to build a terrestrial wireless network for (link) could intensify competition, the entire telecom sector is banking on customer loyalty.

AT&T has invested heavily in expanding its fiber network, including a $5.75 billion acquisition of Lumen’s consumer fiber business in 2025.

Analysts at MoffettNathanson commented that AT&T’s recent hikes on fiber internet rates suggest the company may have concluded, ‘Discounts are not generating sufficient incremental business volume, so they are not worth it.’

The average revenue per user (ARPU) for AT&T’s fiber subscribers declined 4% in the third quarter, reflecting discounts, promotional pricing in new markets, and the integration of lower-priced Lumen customers.

During the quarter, AT&T added a net 379,000 postpaid wireless users, compared to FactSet’s estimated increase of 379,300.

AT&T’s quarterly revenue and profit both exceeded expectations, with the company raising its full-year adjusted earnings per share forecast to about $2.40, up from the previous range of $2.25 to $2.35.

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