AT&T, one of the top three U.S. phone carriers, is currently facing heightened competition and an uptick in customer losses. To help give it an edge over its rivals, the company has launched a first-of-its-kind smartphone, targeting a vital customer group.
During the fourth quarter of 2025, AT&T saw a decline in customer loyalty as the rate of postpaid phone customers who canceled their service rose to 0.98%, up 13 basis points year over year, according to the company’s latest earnings report.
AT&T also saw 255,000 prepaid phone customers pull the plug on their service. This led to a churn rate of 2.89% in the segment, which is 16 basis points higher than the churn rate reported in the same quarter in 2024.
The spike in customer losses comes after AT&T reduced its autopay discount in April last year and eliminated it for customers who pay their monthly bills with a credit card. AT&T also faced scrutiny last year for allegedly using a bait-and-switch tactic, surprising customers with higher-than-expected monthly bills after enticing them from rival phone carriers with generous discounts.
During an earnings call last month, AT&T CEO John Stankey said there has been a spike in “switching activity” in the wireless industry and that “macro factors” are driving slow customer growth in the traditional postpaid phone market.
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AT&T challenges rivals with new smartphone
AT&T has indeed been facing mounting pressure from top competitors such as T-Mobile and Verizon, which have been introducing more deals and discounts to lure customers.
However, the phone carrier has recently launched a smartphone for kids to appeal to families, giving it a leg up on its rivals.
AT&T’s new amiGO Jr. Phone, which the company claims in a press release is “a simple and safe smartphone designed to keep parents connected and kids protected,” is the first phone from any wireless carrier created for children.
The launch of the new phone comes during a time when 40% of AT&T’s current customers are parents. AT&T collaborated with Samsung to develop the phone, which contains several safety features, giving parents peace of mind.
Related: AT&T to launch new service for customers as it takes on T-Mobile
For example, after downloading the free amiGO Jr. Phone app and pairing it with their child’s amiGO Jr. Phone, parents can set up to 30 approved contacts for their child to call and message. They can also receive alerts when their child enters or leaves predefined safe zones during designated times.
In addition, parents can track their kids’ whereabouts in real time and even put their child’s device in “school mode,” scheduling dedicated, distraction-free time for their child to focus and concentrate.
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“As smartphones become a daily necessity, parents have made it clear they need better tools to help their children navigate the digital world safely,” said Erin Scarborough, a senior vice president at AT&T, in the press release. “We listened. We worked with kids and parents to design the AT&T amiGO™ Jr. Phone to give parents peace of mind and kid friendly options for today’s digital world.”
To pair with the new amiGO Jr. Phone, AT&T also launched the amiGO Jr. Watch 2, a new smartwatch for kids. AT&T is offering both devices for $2.99 a month each with no trade-in required.
AT&T’s new smartphone for kids comes as its top two competitors, T-Mobile and Verizon, only offer parental control features through apps.
AT&T addresses a growing challenge for parents
The launch of the AT&T amiGO Jr. Phone also comes amid mounting concerns nationwide about children’s online safety.
While many parents across the country have smartphone-use rules for their kids, more than half aren’t using parental controls to manage their children’s use of these devices, according to a recent survey from the Family Online Safety Institute.
Why U.S. parents worry about their kids’ smartphone use:
- Approximately 88% of U.S. children are most likely to have access to smartphones.
- Only 47% of parents set parental controls on their children’s smartphone devices.
- About 46% of parents said posting on social media is the most worrying online activity.
- Specifically, 73% said they worried about their children encountering predatory behavior online, while 66% cited concerns about their children giving away personal information and 63% said cyberbullying.
- Roughly 44% of parents are also worried about their children spending too much time online.
Source: Family Online Safety Institute
“Our findings show that even as parental controls become more available, adoption remains low,” said Family Online Safety Institute CEO Stephen Balkam, in a press release. “This should prompt serious reflection across the tech industry and policymaking circles and reinforce efforts to make parental controls more accessible and user-friendly.
“At the same time, this research shows that open communication remains one of the most powerful tools parents have to support their children’s digital wellbeing,” he continued.
It is also vital for parents to monitor their kids’ smartphone use to help prevent them from suffering from mental and physical health risks.
A study from the Children’s Hospital of Philadelphia last year also found that kids who own a smartphone at age 12 face increased risks of depression, obesity and inadequate sleep. Those who adopted smartphones at an age earlier than 12 face additional risks of obesity and insufficient sleep.
“Most probably, all teens will eventually have a smartphone. Once this happens, it is advisable to monitor what our children do on their phones, ensuring they’re not exposed to inappropriate content and that smartphones don’t disrupt sleep,” said Dr. Ran Barzilay, a child psychiatrist and lead author of the study, in a press release.
“It’s critical for young people to have time away from their phones to engage in physical activity, which can protect against obesity and enhance mental health over time,” he added.
Related: T-Mobile drops 2 new phone plans to stop customers from fleeing
