AT&T (NYSE: T) posted mixed quarterly results, adding 2.8 million new connections but seeing a drop in wireless revenue year-over-year.

The operator reported a net loss of 256,000 postpaid phone customers but posted 696,000 net adds in tablets and computing devices and 469,000 net prepaid adds. AT&T also added a net of 1.2 million connected devices during the quarter.

Wells Fargo analysts had expected a net loss of 300,000 postpaid phone customers and 1 million net connected device adds. AT&T's quarterly postpaid churn of 1.18 percent beat Wall Street estimates of 1.2 percent but fell short of Wells Fargo's estimate of 1.1 percent.

But AT&T's wireless revenue was $18.9 billion during the quarter, down 4.9 percent year-over-year due largely to weakened equipment sales; the carrier's wireless services revenue was down 1.7 percent year-over-year. The carrier also said it expanded its LTE network to cover 355 million POPs in the U.S.

Additionally, AT&T continued to tout the business opportunities that it said will increasingly emerge following its acquisition of DirecTV last year. It said 500,000 users have signed up for its new promotion that provides unlimited mobile data to DirecTV subscribers, and said more initiatives to leverage the combination of video content and mobility are in the works.

The carrier said it will continue to pursue mobile video in the U.S. and Mexico, where it expanded its wireless business through acquisitions last year. And it implied sponsored data will play a large role as it rolls out new mobile video services in 2016.

"I think it's important to think about what we have assembled here," AT&T CEO Randall Stephenson said. "Between DirecTV and our Otter Media relationship we think we have the best premium set of content to anybody anywhere. And we're getting the rights secured to allow us to begin delivering this over whatever platform the customer wishes -- if the customer wants this on a tablet, or a smartphone, or a TV, we're getting to where we can do that…. I think one would just have to assume that sponsored data would be a critical element on how a customer would take advantage of this."

Key metrics from AT&T's quarterly report include:

Subscribers: The carrier's postpaid net adds of 526,000 beat Evercore's estimates of 400,000 to 450,000, and AT&T's 256,000 postpaid phone losses were less than Evercore's estimates of 300,000 to 350,000. But AT&T's postpaid net adds were heavily skewed toward tablets, and its overall net adds were heavily skewed to prepaid despite the carrier's strategy of targeting more lucrative postpaid users. "Competitively, AT&T's postpaid position is remarkably weak," MoffettNathanson wrote.

Financials: AT&T's wireless services revenue was $14.8 billion, 2.1 percent shy of Evercore's estimates and down 1.7 year-over-year. But those shortfalls are due in part to AT&T's aggressive transition to equipment installment plans -- 46 percent of its smartphone users are on an EIP -- and the carrier expects revenues from wireless services to begin to recover through 2016 as more users move to installment plans.

Handsets: AT&T reported $4.1 billion in wireless equipment revenues during the quarter, falling 11.4 percent short of Evercore's estimate. AT&T said unexpectedly weaker upgrade activity and 672,000 BYOD customers -- a record for the carrier -- were to blame.

LTE: AT&T has expanded its network to cover 355 million POPs in the U.S. and Mexico. The carrier also said its LTE network covers 44 million POPs in Mexico alone, and it plans to deploy LTE in Mexico in the second quarter of 2016.

Churn: Postpaid churn was solid during the quarter at 1.18 percent, down four basis points from AT&T's year-over-year numbers and roughly within analysts' estimates. Full-year postpaid churn was 1.09 percent.

Summary: AT&T is making two big gambles entering 2016: It's investing heavily in mobile video in the wake of its DirecTV acquisition despite unproven demand for on-the-go TV, and it's betting it can elbow its way into an uncertain wireless market in Mexico. The data AT&T presented in its earnings report was mixed, to be sure, but a harder look provides evidence the nation's second-largest carrier is beginning to struggle, MoffettNathanson wrote.

"AT&T's results are, once again, almost impenetrable in their obfuscation of underlying trends," according to MoffettNathanson. "But unlike last quarter, this time it is easier to grasp the broad gestalt. AT&T is struggling, and their results were weak across the board."

For more:

- see this AT&T press release

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AT&T to lose 300,000 phone subscribers in Q4, but margins will rise, Wells Fargo predicts

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Article updated Jan. 27 with additional information and analyst commentary.