A pedestrian walks past an AT&T store in New York.

Scott Mill | CNBC

AT&T Shares jumped on Wednesday after the carrier reported fourth-quarter subscriber growth that beat Wall Street estimates, ignoring rivals’ lower pricing strategies.

The US telephone service provider added 217 million total subscribers across all of its divisions for the fourth quarter, beating StreetAccount’s estimate of 215 million. However, new phone subscribers in particular missed analysts’ expectations, hitting 656,000 net additions, compared to an estimate of 678,400, according to StreetAccount.

Shares of AT&T closed up 6% on Wednesday, trading at $20 per share.

The company continued to dismiss the idea that the carrier industry is in a price war.

“I don’t buy into the idea that there’s a race to the bottom. I actually think the industry is doing pretty well,” CEO John Stankey said in an interview on “Squawk on the Street.” from CNBC.

T-Mobile has touted its ongoing “Price Lock,” which promises the company won’t raise monthly phone rates in response to inflation, despite raising other charges for millions of customers in early 2022. , according to a Bloomberg report. The carrier called Verizon and AT&T to raise rates.

This marketing campaign sparked speculation as to whether competing service providers would adjust their pricing strategies in order to attract more subscribers. T-Mobile also offered customers discounts to switch from competing carriers.

AT&T’s refusal to engage in the price war does not seem to have any consequences. The company reported a phone churn of 0.84%, a slight improvement from a 0.85% churn in the fourth quarter of last year.

Here’s how AT&T fared in the fourth quarter compared to what Wall Street had expected, based on an average of analyst estimates compiled by Refinitiv:

  • Adjusted earnings per share: 61 cents vs. 57 cents expected
  • Total income: $31.34 billion vs $31.38 billion expected

The company expects wireless revenue growth of 4% in 2023, below analysts’ expectations.

Stankey said on the company’s earnings call that it remains “very conservative” as it heads into its new fiscal year and watches the recession as well as geopolitical disruptions.

Verizon also announced fourth-quarter results this week that matched analysts’ expectations. It added 217,000 telephone subscribers, up from 8,000 in the third quarter, but lagging AT&T’s subscriber growth.

Verizon CEO Hans Vestberg explained in a call with analysts that the company has been able to rely on its business customers to sustain subscriber numbers, but said it is still working to rebuild the side. consumer of its activity.

Verizon raised prices last year to offset rising costs, which hurt the consumer base at the bottom of its price points.

Vestberg said in an interview with CNBC’s “Squawk Box” on Tuesday that he was looking to see “where inflation is going this year” in order to assess Verizon’s pricing strategy for 2023.

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