AT&T, one of the top phone carriers in the U.S., is noticing an alarming shift in customer behavior as it battles growing competition from rivals and faces controversy over its prices. In response to the growing trend, AT&T executives are calling out the primary sources of the problem.
In AT&T’s third-quarter earnings report for 2025, it revealed that while it gained 405,000 new postpaid phone customers during the quarter, its postpaid phone churn (the amount of customers who disconnected their phone service) increased by 14 basis points year-over-year.
The loss of more phone customers comes after it reduced its monthly discount for autopay and paperless billing in April. Customers who pay their monthly bill with a credit card saw their autopay and paperless billing discount completely removed, which sparked outrage.
AT&T also recently faced controversy for allegedly hitting customers with higher-than-expected monthly bills after luring them from rival phone carriers with generous discounts.
During an earnings call on Oct. 22, AT&T Chief Financial Officer Pascal Desroches said that the spike in phone customers pulling the plug on service follows “seasonal patterns.”
“Postpaid phone churn was 0.92%, up 14 basis points versus a year ago,” said Desroches. “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. 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.”
AT&T is facing tougher competition from rivals
AT&T CEO John Stankey also flagged that competitors such as T-Mobile and Verizon have been “pretty aggressive” with tactics to lure customers.
“It’s been competitive,” said Stankey. “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.”
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Recently, T-Mobile has been offering free phone lines and deals through its T-Mobile Tuesdays section of its T-Life app to lure customers. Also, Verizon has allegedly been using artificial intelligence to scan bills from rival phone carriers to offer customized deals to customers. Like T-Mobile, Verizon has even been offering generous Samsung and iPhone promotions.
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AT&T and other rival phone carriers are also battling heightened competition from cable TV companies, which have been offering consumers discounts on bundled phone, internet and TV services.
According to recent data from MoffettNathanson, which was shared by Light Reading, Spectrum, Comcast, and Altice USA added 886,000 new phone customers during the first quarter of 2025, up from the 804,000 they added during the same quarter last year.
Dominick Miserandino, CEO of RTMNexus, said that in order for AT&T to attract back customers it recently lost to rivals, it must focus on rebuilding trust.
“AT&T can’t simply rely on brand name or legacy status to win back lost customers,” said Miserandino. “First and foremost, they must rebuild because when a wireless carrier loses customers, the big deal is that they are all essentially providing a service, which is connectivity, so the differentiator to me is trust.”
AT&T and other phone carriers suffer the consequences of high prices
It is no surprise that AT&T is seeing higher postpaid phone churn. According to a recent survey from WhistleOut, many Americans are seeking cheaper phone plan options as they face price increases for phone services.
- The average cost of an unlimited data plan for American families is $244 a month.
- Over 83.2 million U.S. households overspend on phone plans every year.
- Also, 58% of Verizon, T-Mobile and AT&T customers are considering switching to a different phone carrier as their services become more expensive.
- All three phone carriers risk losing 230 million customers combined due to high mobile plan pricing.
During the earnings call, Stankey emphasized that AT&T is very careful when raising prices for its services.
“We don’t just raise prices to raise prices,” said Stankey. “We raise prices when we think we’ve given the customer greater value.”
The last time AT&T raised prices for its phone plans was in August last year. Monthly prices for older phone plans increased by $10-$20, depending on the number of phone lines attached to the plan.
Related: T-Mobile plans move that will push customers to upgrade phones
