AT&T is facing challenges in its wireless business as customers are increasingly opting for cheaper alternatives, leading to higher churn rates. In the first quarter of 2026, postpaid phone churn reached 0.89%, up from 0.83% the previous year. The carrier also saw an increase in prepaid phone churn to 2.62%. This trend is driven by consumers seeking more affordable options to avoid rising wireless bills, such as MVNOs, cable companies, and satellite mobile services like Starlink and Amazon Leo.
A recent survey found that 42% of AT&T, T-Mobile, and Verizon customers experienced bill increases, with 58% considering switching to another carrier. AT&T risks losing 64.9 million customers due to its pricing strategy, including restricting autopay discounts and implementing price hikes for legacy wireless plans.
To combat churn, AT&T is focusing on offering converged phone and internet services. CEO John Stankey stated that this strategy is aimed at attracting and retaining customers by aligning them with the company’s assets. By expanding converged offerings and increasing fiber internet availability, AT&T aims to reduce churn rates and improve customer retention.
In line with this strategy, AT&T completed a $5.75 billion acquisition of Lumen’s Mass Markets fiber business, expanding its fiber internet service across 32 states. The introduction of the OneConnect subscription plan in March offers customers combined wireless and fiber internet services starting at $90 per month. This plan targets customers who prefer to keep their devices longer and are open to porting them between carriers.
Stankey emphasized the success of attracting one to two-line accounts, which are expected to grow and contribute to future revenue. As AT&T continues to offer converged services, Stankey believes that churn rates will eventually reach a tipping point where the benefits of the strategy will be realized.
However, analyst Craig Moffett warns that AT&T’s reliance on converged offers may not be sustainable in the face of competition from cable operators and standalone offerings from other providers. While consumer demand for bundled mobile and internet services is on the rise, Moffett cautions that these offerings may simply amount to discounts rather than true cost savings.
As more Americans seek bundled services for cost-effectiveness and convenience, AT&T’s strategy of convergence may appeal to a significant portion of the market. With the growing importance of comprehensive connectivity solutions in today’s digital landscape, AT&T’s focus on offering bundled services could help address customer needs and reduce churn in the long run.
