Core Insights - AT&T is experiencing a concerning trend in customer behavior amid increased competition, prompting the company to implement a bold strategy to retain customers [1][7] Customer Metrics - In Q4 2025, AT&T added 421,000 new postpaid phone customers, but the postpaid churn rate increased to 0.98%, up 13 basis points from 2024 [1][2] - The prepaid segment saw a loss of 255,000 customers, resulting in a churn rate of 2.89%, an increase of 16 basis points year over year [2] Pricing and Discounts - AT&T reduced its autopay discount for debit card users from $10 to $5 and eliminated it for credit card users, which has contributed to customer dissatisfaction [3] - The Administrative & Regulatory Cost Recovery fee was raised from $3.49 to $3.99 per line, further straining customer relationships [4] Competitive Landscape - Approximately 34% of AT&T customers are considering switching carriers due to better pricing and promotions offered by competitors [7] - Smaller carriers like Consumer Cellular and Mint Mobile have significantly higher customer experience scores compared to AT&T [7] Strategic Initiatives - AT&T is focusing on bundling phone and internet services to reduce churn, a strategy that has shown success in areas where fiber is offered [8][9] - The company added 283,000 new AT&T Fiber customers and 221,000 AT&T Internet Air customers in Q4, reflecting a growing demand for its internet services [11] Revenue Growth Expectations - AT&T anticipates total wireless service revenue growth of 2% to 3% annually over the next three years, driven by increased consumer relationships and convergence of services [14] - The company plans to expand its fiber internet footprint by 5 million locations annually through the end of the decade [14][15] Market Trends - There is a notable shift in consumer behavior as customers are moving away from traditional cable internet services to options provided by phone carriers [12] - AT&T's reliance on bundling services may provide short-term relief from churn but poses risks in a competitive market [16][17]