New Delhi

AT&T added more wireless subscribers than the market had initially expected in the second quarter, thanks to the variety of higher-end unlimited plans that the telecommunications operator offers, capturing a record number of new customers. The company's shares rose 2.4 per cent in premarket trading.

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The telecom giant added 419,000 monthly bill-paying wireless phone subscribers, topping the consensus of 284,800 additions in a poll of five analysts by FactSet. Priced cheaper than its competitors normally are, AT&T's unlimited plans have been able to attract budget-conscious consumers in a very competitive field against T-Mobile and Verizon.

This has helped AT&T also to reduce the attrition rate better than its competitors. Its postpaid phone churn rate was 0.70 per cent, second lowest for a second quarter ever.

Free cash flow, a key metric that determines dividend payouts, came in more than 9 per cent higher at $4.6 billion, beating LSEG estimates of $4.22 billion. But AT&T's revenue was weighed down by slower phone upgrades in the US, similar to Verizon's comments. Mobility equipment revenue dropped 8 per cent in the April-June period and total revenue of $29.8 billion fell below the estimated $29.92 billion, based on LSEG data.

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While AT&T is one of the largest telecom operators in the US, it has been ravaged this year by data breaches and long outages. On Monday, the US Federal Communications Commission detailed that a country-wide outage in February, which went on to last more than 12 hours, blocked more than 92 million voice calls and staved off over 25,000 attempts to reach 911. That alone could land the company a fine.

Although the truly phenomenal wireless subscriber growth and bracing cash flow of AT&T underscore leading competitiveness, the company has to work out solutions to operational challenges and revenue shortfalls to sustain the market leadership.