During the summer, after AT&T reported its second quarter earnings, we made a point of telling you about the 17-basis point jump in AT&T's postpaid phone churn to .87% from the .70% reported during the same quarter last year. Churn is the percentage of a wireless firm's customers that discontinue their service during a specific period of time, usually one quarter. Carriers want to report a lower churn.
AT&T's Q3 postpaid phone churn rose 14 basis points year-over-year
AT&T recently released its third quarter results and postpaid phone churn was .92%, which was up 14 basis points from the .78% reported during the third quarter last year. Sequentially, the gain in postpaid phone churn was 5 basis points from the second quarter of 2025. Not all of the news released by AT&T during the quarter was bad as the third-largest wireless carrier announced the net addition of 405,000 postpaid phone subscribers from July through September.
I've often called the postpaid phone category the most important category for wireless firms. That's because it covers a wireless provider's most expensive plans. Subscribers to these plans typically stick with the carrier they choose for years unlike those who use a prepaid plan. Customers using a prepaid plan are more apt to shop around seeking the best deal. Additionally, postpaid subscribers are subject to a credit check and are billed after they use the service each month allowing the postpaid phone customer to generate a more predictable revenue stream for the carrier.
Some new AT&T customers received a monthly bill higher than the amount they were promised
The increase in Q3 postpaid phone churn came after AT&T reduced its discount for customers using paperless billing and autopay. Customers using a credit card as opposed to a debit card for autopay and paperless billing had their discounts completely removed. Additionally, some new subscribers who had been persuaded to jump to AT&T from another carrier discovered that their monthly bill was higher than expected.
AT&T Chief Financial Officer Pascal Desroches, during a conference call on October 22nd, blamed the increase in churn on "seasonal patterns." The CFO said, "Postpaid phone churn was 0.92%, up 14 basis points versus a year ago. This reflects increased marketplace activity and, to a lesser degree, an increase in the portion of our customer base reaching the end of device financing periods, which normalized as we exited the quarter."
AT&T CEO John Stankey. | Image credit-AT&T
Desroches added, "Based on this operating environment, we continue to plan for postpaid phone churn and upgrades to follow seasonal patterns in the fourth quarter, when we typically see more switching and upgrade activity due to new device launches and the holiday season."
Is AT&T in trouble?
Yes. The rising churn rate is not a good sign.
100%
AT&T CEO John Stankey will have the longest tenure as a CEO in the wireless industry starting on November 1st. That's when Srni Gopalan takes over for Mike Sievert at T-Mobile. Stankey says that AT&T's rivals like Verizon and T-Mobile, are using aggressive tactics to lure customers away. Stankey said, "It’s been competitive. It continues to be competitive. There are shifts in tactics all the time that occur in this market, and we’re in a cycle right now that, because of the maturity level, tactics have shifted."
Stankey's faux pas
One ploy that has worked for T-Mobile is placing deals including free lines in the T-Mobile Tuesdays section of its T-Life app. This way, these deals are seen by T-Mobile subscribers looking to get their rewards from the T-Mobile Tuesdays reward program. Verizon also has been using AI to analyze bills from rival providers in an attempt to come up with a deal that will likely result in a customer switching from another company. Verizon and T-Mobile have also used generous Samsung Galaxy and Apple Phone deals to get consumers to leave AT&T and sign with one of them.
AT&T CEO Stankey made it clear that the carrier doesn't raise its prices for the hell of it. He said, "We don’t just raise prices to raise prices. We raise prices when we think we’ve given the customer greater value." Uh John, that's not such a great statement. Consumers are always seeking greater value and what you are saying is that every time the value pendulum swings too much in the direction of its customers, you can expect a price hike.
Alan, an ardent smartphone enthusiast and a veteran writer at PhoneArena since 2009, has witnessed and chronicled the transformative years of mobile technology. Owning iconic phones from the original iPhone to the iPhone 15 Pro Max, he has seen smartphones evolve into a global phenomenon. Beyond smartphones, Alan has covered the emergence of tablets, smartwatches, and smart speakers.
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