AT&T (T) managed to grasp increased momentum from consumers during the first few months of this year, despite recently scaling back a crucial discount.
In its first-quarter earnings report for 2025, AT&T revealed that it generated a net income of $4.7 billion during the quarter, which is 19% higher than what it earned during the same quarter in 2024.
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AT&T also added 324,000 new postpaid phone customers and 261,000 new Fiber internet customers during the first few months of the year.
Related: AT&T quietly issues stern warning to customers
These results come after AT&T quietly warned customers last month that starting on April 24, their autopay discount will decrease from $10 to $5 if they pay their monthly bill with a debit card. This move frustrated customers, with some even threatening to switch phone providers.
AT&T has bad news for customers
While AT&T is facing increased profits, the phone carrier is sounding the alarm on the potential impact of a growing threat.
On April 2, President Donald Trump raised eyebrows across the nation when he announced a 10% “baseline” tariff on all countries importing goods to the U.S., with roughly 60 countries seeing higher tariff rates.
Tariffs are taxes companies pay to import goods from overseas, and the extra cost is often passed down to consumers through price hikes.
However, on April 9, he switched gears and enforced a 90-day pause on reciprocal tariffs on all countries (except China), dropping them to a universal rate of 10%. He also unexpectedly hiked tariffs on China to 145%.
Related: Verizon suffers major loss as customers switch gears
During an earnings call on April 23, AT&T CEO John Stankey said that tariffs can have a negative impact on a number of devices the company sells.
“The announced tariffs could potentially increase the cost of smartphones and other devices, as well as the cost of network and technical equipment,” said Stankey. “The magnitude of any increase will depend on a variety of factors, including how much of the tariffs our vendors pass on, and the impact that the tariffs have on consumer and business demand.”
He also warned that AT&T may have to hike prices for its devices due to Trump’s tariffs.
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“So I think that if ultimately costs are passed to us from those that we buy handsets from, unfortunately for the customer, we’re going to have to come up with some new ways for them to figure out how to digest that increase in pricing,” said Stankey.
AT&T is already noticing an increased number of customers upgrading their phones amid anxiety about Trump’s tariffs inflating prices in the next several months.
“Upgrades have trended higher than expected since the announcement of the reciprocal tariffs in early April, which we believe triggered an acceleration in consumer upgrade behavior,” said AT&T Chief Financial Officer Pascal Duroche during the call.
AT&T’s warning takes a page out of Verizon’s book
AT&T’s warning about potentially raising its prices for devices follows in the footsteps of Verizon (VZ) , which issued the same warning about passing down tariff costs to customers during an earnings call on April 22.
“If we’re going to see those type of increases on handsets that we’ve heard, we are not planning to absorb those,” said Verizon CEO Hans Vestberg during the earnings call. “I mean, that needs to be passed onto the customers. That’s the only way to do it because that’s so much money.”
Unlike AT&T, Verizon has recently been noticing fewer customers opting to upgrade their phones.
“Customers continue by choice to hang on to their phones for longer periods of time,” said Verizon Chief Financial Officer Tony Skiadas during a Morgan Stanley conference last month. “The average upgrade cycle for us is up over 40 months. It’s like 42 months right now. So the phones are made better. And from our standpoint, we’ll continue to be disciplined in our approach to retention.”
According to a survey from CNET in March, 33% of U.S. adults have felt pressured to make tech purchases due to fear of potential price hikes from tariffs, while one in five adults has already made a purchase.
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