http://www.nytimes.com/2014/10/23/technology/att-profit-drops-but-customers-stay-with-the-carrier.html 2014-10-22 23:55:48 AT&T Profit Drops, but Customers Stay With the Carrier Strong customer growth suggests that a price-cutting war in the wireless industry is not eroding AT&T’s business. === SAN FRANCISCO — AT&T; on Wednesday But over all, the third quarter was not that unkind to AT&T.; The company said it added two million customers to its wireless business, including 785,000 contract subscribers and 500,000 automobiles subscribing to data plans. AT&T; also reported strong growth of U-verse for phone, Internet and television. The company said it added 601,000 high-speed Internet subscribers and 216,000 TV subscribers. “Our strategy is on track and our investments in giving customers best-in-class service to access content everywhere and on any screen continue to pay off,” said Randall Stephenson, AT&T;’s chief, in a statement. “We had strong subscriber growth in wireless and U-verse, and our strategic business services revenues continued to post double-digit growth.” The company, based in Dallas, has been at the center of an intense price-cutting war among wireless industry competitors. Over the last 18 months, the smaller phone carriers Sprint and T-Mobile USA have offered aggressive discounts on things like family plans, among other perks. AT&T; has managed to defend itself by offering some similar discounts and phone plans. For example, when T-Mobile offered to AT&T; earlier this year also AT&T; has also offered a special deal to its contract subscribers. Traditionally, when customers sign up for a two-year contract, they pay a discounted price for a phone but a higher monthly bill to cover the remaining cost of the phone over time. AT&T;'s offer was to eliminate the subsidy costs to those who signed up for plans with 10 gigabytes of data or more. That, at least temporarily, leads to less profit from AT&T;’s wireless services. Eventually, revenue will probably bounce back because those customers will return to normal subsidy plans or pay full price for their devices, said Jan Dawson, an independent telecom analyst for Jackdaw Research. “It should be positive over the longer term, but there’s a short-term dip while they wait for this transition to work its way through,” Mr. Dawson said. But to AT&T;'s credit, there has not yet been a mass exodus of AT&T; subscribers switching to other carriers. AT&T;'s customers appear more loyal than they were before. AT&T; said that among contract subscribers, churn, the rate at which people leave, was 0.99 percent, down from 1.07 percent in the same period a year ago. AT&T; said it had activated 6.8 million smartphones over the quarter, compared with 6.7 million in the same period last year. The company’s financial earnings missed the expectations of Wall Street analysts, who had expected 64 cents a share and revenue of $33.2 billion, according to a survey of analysts by Thomson Reuters.