AT&T has exceeded Wall Street forecasts for the first quarter, bolstered by significant growth in wireless subscriber additions and an impressive increase in free cash flow. The telecom leader saw a surge in customers opting for its higher-tier unlimited plans, largely driven by its competitive pricing and expansive 5G network rollouts.

During this period, AT&T added 349,000 net new monthly bill-paying wireless phone subscribers, far surpassing the analyst expectations of 286,800 additions projected by FactSet. This growth is attributed to AT&T’s strategies that focus on appealing to budget-conscious consumers, offering plans that are generally more affordable than those of competitors like Verizon.

The company also reported a substantial 7.7% increase in broadband revenue, aided by its ongoing expansion of the fiber network. “We achieved a record-low first-quarter postpaid phone churn, grew consumer broadband subscribers for the third consecutive quarter, and expanded margins in mobility and consumer wireline,” said CEO John Stankey.

AT&T’s free cash flow for the quarter was particularly notable, more than tripling to $3.1 billion, well above the estimates of $2.53 billion set by Visible Alpha. This metric is essential for investors, especially given AT&T’s status as one of the largest dividend payers in the U.S., indicating strong potential for continued dividend payouts.

Despite these positive indicators, AT&T reported total revenues of $30 billion, slightly below the $30.54 billion expected by LSEG. The U.S. telecom sector has been experiencing muted phone upgrades, often accompanied by device subsidies, which have impacted revenue streams across the board.

However, AT&T has managed to maintain a competitive edge with better customer retention compared to its rivals. Unlike Verizon and T-Mobile, AT&T has not experienced a significant drop in upgrade rates. “AT&T’s emphasis on customer retention over acquisition has contributed to a lower churn rate of 0.72% in the first quarter,” analysts at Morningstar noted last month.

Verizon, which initiated the earnings reports for the U.S. telecom sector this quarter, also saw fewer subscriber losses, aided by its flexible plans and discounted streaming bundles. As the competitive landscape continues to evolve, AT&T’s strategic focus on expanding its network capabilities and enhancing customer offerings appears to be paying dividends, positioning it well in the fiercely competitive market.