AT&T Inc, the No. 2 U.S. wireless carrier, reported a smaller-than-expected increase in quarterly revenue as it earned less from each postpaid customer for its wireless services amid growing competition from rivals.
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The company said on Tuesday that average revenue per postpaid user fell 2 percent in the fourth quarter ended Dec. 31.
AT&T said it added a net 526,000 postpaid and 469,000 prepaid customers in the quarter.
Analysts had expected net additions of 485,000 postpaid and 354,000 prepaid connections, according to FactSet StreetAccount.
AT&T's shares were down more than 1 percent in extended trading.
An oversaturated U.S. wireless market has led to fierce competition between market leader Verizon Communications Inc, AT&T and smaller rivals Sprint Corp and T-Mobile US Inc, which have stepped up promotions to entice customers.
AT&T has been seeking new revenue streams and is betting on the acquisition of the DirecTV satellite TV business to help beef up its bundles of cellular, broadband, TV and fixed-line phone services.
The company's total operating revenue rose 22.3 percent to $42.12 billion, slightly missing analysts average estimate of $42.75 billion, according to Thomson Reuters I/B/E/S.
Net income attributable to AT&T was $4.01 billion, or 65 cents per share, compared with a loss of about $4 billion, or 77 cents per share.
The company is reporting quarterly earnings for the second time since completing its $48 billion acquisition of DirecTV, which made it the world's biggest pay-TV operator.
(Reporting by Abhirup Roy in Bengaluru; Editing by Savio D'Souza)