AT&T has been rapidly revamping its wireless offerings as it struggles to keep customers from switching to growing competitors. After months of facing elevated churn in its wireless business, the carrier is betting big on its new offers to reverse this trend.
In the first quarter of 2026, AT&T’s postpaid phone churn, the percentage of customers canceling their service, reached 0.89%, up from 0.83% in the same quarter in 2025, according to the company’s most recent earnings report.
The carrier also saw churn in its prepaid phone business rise to 2.62%, up 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 virtual 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 last year found that 42% of AT&T, T-Mobile and Verizon customers faced bill increases for their wireless service in the past year.
While 58% of these customers said they are considering switching to a different carrier, AT&T is at risk of losing 64.9 million customers due to its wireless plan prices.
Last year, AT&T restricted its autopay discount and faced backlash for allegedly using a bait-and-switch tactic to lure customers from competitors. In March, it announced price increases for legacy wireless plans, which threatens to push more price-conscious customers out the door.
AT&T CEO says new strategy is designed to reduce churn
During an earnings call on April 23, AT&T CEO John Stankey said that despite elevated churn, the company welcomed 294,000 postpaid phone net adds in the first quarter of this year.
He said the company is betting big on its strategy of offering converged phone and internet services to attract and retain customers.
“The best way for us to manage churn is to converge customers,” said Stankey. “When we get through the repositioning and the shifting that’s going on in the industry right now, which is aligning customers to asset basis, I believe you’re naturally going to see that churn dynamic improve.”
Over the past year, AT&T has ramped up its converged offerings, a move that rivals those from cable competitors. The carrier’s efforts also come as it plans to expand its fiber internet footprint by 5 million locations each year through the end of this decade.
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To help accomplish this goal, it completed a $5.75 billion acquisition of Lumen’s Mass Markets fiber business in February, which allowed AT&T’s fiber internet service to be available across 32 states.
Related: AT&T quietly tests new service that rivals T-Mobile
Shortly after this move, AT&T introduced its OneConnect subscription in March, offering customers combined wireless and fiber internet service at a starting price of $90 per month.
Stankey said this plan specifically targets customers who aren’t too keen on upgrading their devices.
“One of the things that we see is, first of all, the BYOD (bring your own device) segment is increasing more broadly,” he said. “That’s one reason why we started with it. We see customers more willing to hang on their devices a bit longer, and they’re certainly becoming more accustomed to porting them from one carrier to the next.”
“And so we want to tailor this plan to make sure that we can receive those customers and then attach them to a network construct that drives churn down,” he continued.
Stankey also said that throughout the year, AT&T will start offering “more variants” of the OneConnect plan.
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He highlighted that converging customers has so far been successful for the company, as it mostly attracts customers who add only one to two phone lines per account. Those are the accounts AT&T is targeting because it believes that those customers will stay longer and make more purchases in the future.
“We’re getting account growth,” he said. “And if you looked at like average line sizes, for example, on our wireless account base, those accounts that are coming in tend to be below average for what we might have in the embedded base. And that’s an indicator that we’re picking up.”
“One and two-line accounts that are new to us,” he continued. “They’re new fiber, they’re new wireless. And that’s really good because ultimately, those one- and two-line accounts become the three- and four-line accounts of the future.”
As AT&T doubles down on offering converged wireless and internet services to customers, Stankey believes that churn in the company’s wireless business will reach a “tipping point.”
“I think there’s going to be a little bit of the accelerated churn dynamic that you’ve been seeing in the last couple of quarters as that shakes itself out,” said Stankey. “But just like any math equation, you hit that tipping point where you start to get the benefits of the strategy. And I think you’re going to see it ultimately come back in the line.”
AT&T CEO John Stankey believes bundling wireless and internet services is the key to combating rising churn.AT&T/Daniel J. Macy
Analyst warns about AT&T’s strategy amid shifting consumer demand
In response to AT&T’s increased reliance on leveraging converged offers to combat churn, MoffettNathanson analyst Craig Moffett said in a report for investors, which was obtained by Fierce Network, that “the narrative is by now relatively familiar.”
“AT&T will compete against a cable operator with a cost (and consumer price) advantage in offering a similar converged bundle, and against price-based stand-alone offerings from FWA and increasingly, LEO satellite,” said Moffett.
“As we’ve warned many times, ‘convergence’ is an elevated name for ‘discounts,’” he added. “The product doesn’t work any differently. The costs of providing the two services aren’t any lower together than apart. It’s only the prices, and the margins, that are lower.”
AT&T’s big bet on converged offers comes as more U.S. consumers are preferring to bundle their wireless and internet services to save money, according to a survey from Optimum last year.
Where Americans stand on bundling mobile and internet services:
About 70% of Americans are open to bundling mobile service, while about 62% say the same for internet plans.
Roughly 80% view bundled internet and mobile services as a more cost-effective optionthan paying for each separately.
About 1 in 4 Americans are likely to sign up for a bundled plan 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, demand for “comprehensive connectivity solutions” rises.
“Additionally, the desire for cost-effective options that simplify billing and provide added value is a significant 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 Apr 26, 2026, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.
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