(Reuters) - AT&T Inc, the No. 2 U.S. wireless carrier, said fourth-quarter revenue grew less than expected as it added fewer mainstream wireless customers than a year ago due to stiffer competition from rivals.
The company's stock fell about 2 percent.
AT&T had 526,000 net new postpaid customers, down 38.4 percent from 854,000 a year earlier. For its prepaid service, the company had 469,000 net new customers, it said on Tuesday.
Total operating revenue rose 22.3 percent to $42.12 billion, slightly missing analysts' average estimate of $42.75 billion, according to Thomson Reuters I/B/E/S. Earnings of 63 cents, excluding certain items, were in line with analysts' forecasts.
Average revenue per postpaid wireless customer fell 2 percent in the fourth quarter ended Dec. 31.
AT&T has been seeking new revenue streams and is betting on its 2015 acquisition of the DirecTV satellite TV business to help beef up its bundles of cellular, broadband, TV and fixed-line phone services. It has expanded in Mexico after the recent purchase of the third- and fourth-largest wireless carriers in that country.
Earlier this month, AT&T introduced an unlimited wireless data plan for subscribers of its DirecTV or AT&T U-Verse home television service. In a period of two weeks, half a million subscribers have signed up for unlimited data, executives said on a conference call after the earnings release.
AT&T said it gained 214,000 DirecTV customers, while 240,000 left its U-Verse TV service.
Net income attributable to AT&T was $4.01 billion, or 65 cents per share, compared with a loss of about $4 billion, or 77 cents per share.
The company is reporting quarterly earnings for the second time since completing its $48 billion acquisition of DirecTV, which made it the world's biggest pay-TV operator.
In 2016, the company expects capital expenditures around the $22 billion range. It forecast double-digit consolidated revenue growth and adjusted earnings in the mid-single digit range.
AT&T shares slipped about 2 percent in extended trading to $34.70.
Reporting by Malathi Nayak in New York and Abhirup Roy in Bengaluru; Editing by Savio D'Souza and Richard Chang