AT&T has been revamping its wireless offerings as it struggles to keep customers from switching to growing rivals. After months of experiencing steep increases in its wireless business, the carrier is betting big on its new offerings to reverse the trend.
In the first quarter of 2026, AT&T’s postpaid phone churn, the percentage of customers who cancel their service, reached 0.89%, up from 0.83% in the same quarter in 2025, according to the company’s latest earnings report.
The carrier also saw its prepaid phone business increase to 2.62%, from 2.55%.
The spike in churn comes as more consumers across the country ditch traditional carriers for cheaper alternatives to avoid rising wireless bills. Some of these options include wireless service from mobile network operators (MVNOs) and cable companies, which offer bundled phone, Internet and cable TV plans.
Satellite mobile service is also becoming a growing option for consumers, as services like Starlink expand their offerings and the launch of Amazon Leo looms.
A survey from WhistleOut in December of last year found that 42% of AT&T, T-Mobile and Verizon customers had experienced an increase in the cost of their wireless service in the past year.
Although 58% of these customers said they are considering switching to a different carrier, AT&T is at risk of losing 64.9 million customers because of its wireless plan prices.
Last year, AT&T limited its auto-pay discount and faced a backlash over allegations that it was using a bait-and-switch strategy to lure customers away from competitors. In March, it announced price increases for legacy wireless plans, threatening to push price-conscious customers out the door.
AT&T’s CEO says the new strategy is designed to reduce outages
During an earnings call on April 23, AT&T CEO John Stankey said that despite high churn, the company accepted 294,000 postpaid phone additions in the first quarter of this year.
He said the company is betting big on its strategy of offering bundled phone and internet services to attract and retain customers.
“The best way to manage churn is to engage customers,” Stankey said. “If we go through the repositioning and the evolution that’s happening in the industry right now, which is aligning the customer base with the asset base, I believe you’re going to naturally see that dynamic development.”
Over the past year, AT&T has increased its bundled offerings, a move that rivals cable competitors. The carrier’s efforts also come as it plans to expand its fiber internet to 5 million locations each year by the end of this decade.
To help achieve this goal, it completed the $5.75 billion purchase of Lumen’s Mass Markets fiber business in February, which allowed AT&T’s fiber Internet service to be available in all 32 states.
Related: AT&T is quietly testing a new service that competes with T-Mobile
Shortly after the move, AT&T launched its OneConnect subscription in March, offering customers wireless and fiber Internet service for a starting price of $90 per month.
Stankey said the program is aimed specifically at customers who are less serious about upgrading their devices.
“One of the things we’re seeing is, first of all, the BYOD (bring your own device) segment is increasing,” he said. “That’s one of the reasons we started it. We see customers who are very willing to stay with their devices for a long time, and they tend to move them from one company to the next.”
“So we want to adjust this system to ensure that we get those customers and attach them to the construction of the dismantling network,” he continued.
Stankey also said that throughout the year, AT&T will begin offering “more options” for the OneConnect plan.
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He noted that customer integration has so far been a success for the company, as it attracts more customers who add one to two phone lines to each account. Those are the accounts AT&T is targeting because it believes those customers will stay longer and buy more in the future.
“We’re getting account growth,” he said. “And if you look at the size of the average lines, for example, in our wireless accounts, those incoming accounts tend to be below the average of what we might have in the embedded base. And that’s the direction we’re taking.”
“One-line and two-line accounts are new to us,” he continued. “They’re new fiber, they’re not new cables. And that’s really good because eventually, those one-line and two-line accounts become the three- and four-line accounts of the future.”
As AT&T doubles down on offering bundled wireless and Internet services to customers, Stankey believes the company’s entry into the wireless business will reach a “high point.”
“I think there’s going to be a little bit of the accelerated volatility that you’ve been seeing in the last couple of quarters as that shakes itself out,” Stankey said. “But like any mathematical equation, you get to a point where you start getting the benefits of the strategy. And I think you’ll see it eventually come back in line.”
An analyst warns about AT&T’s strategy amid changing consumer demand
In response to AT&T’s increased reliance on flexible offerings to combat churn, MoffettNathanson analyst Craig Moffett said in an investor report, obtained by Fierce Network, that “the narrative is now normal.”
“AT&T will compete with cable operators for cost (and consumer price) advantages in offering the same bundle, and against stand-alone price-based offerings from FWA and increasingly, LEO satellite,” Moffett said.
“As we’ve warned many times, ‘bundling’ is a fancy word for ‘discounts,'” he added. “The product does not work differently. The cost of providing these two services is not at all lower when combined. Only the prices, and the margins, are lower.”
AT&T’s big bet on the revamped offering comes as more US consumers prefer to bundle their wireless and Internet services to save money, according to research from Optimum last year.
Where Americans stand on combining mobile and Internet services:
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About 70% Americans are open to aggregating cell service, while approx 62% say the same for online programs.
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Almost 80% view integrated internet and mobile services such as very inexpensive option than paying for each separately.
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About 1 in 4 Americans are like that it is possible enrolling in the combined program in 2026.
Source: Optimum
Gabriel Torres, vice president of mobile product management at Optimum, said in a statement to CableTV.com that as more consumers rely on digital technology for remote work, social media, and other uses, the need for “complete communication solutions” is increasing.
“Additionally, the desire for cost-effective options that simplify billing and provide added value is a key motivator for consumers when choosing bundled services,” he said.
Related: AT&T drops 3 new phone plans to keep customers from switching
This story was originally published by TheStreet on April 26, 2026, where it appeared first in the Marketing category. Add TheStreet as a favorite source by clicking here.
