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AT&T’s wireless segment posted mixed results for the third quarter, with lower than expected postpaid phone losses.

The mobile operator reported total postpaid net subscriber adds (excluding migrations) of 117,000, which were in line with Wall Street estimates. However MoffettNathanson analyst Craig Moffett said the company’s 241,000 postpaid phone losses including migrations were a “relatively weak showing.” Though this figure was somewhat better than the 354,000 net postpaid phone subscriber losses for the third quarter of 2016.

Overall, AT&T reported earnings per share of 74 cents and $39.67 billion in revenue for the third quarter, just shy of Wall Street’s expectations of $40.1 billion.

“We continued to operate our business efficiently in the quarter,” AT&T CEO Randall Stephenson commented in a press release. “At a time of transformation in our wireless and video businesses, as well as investment in growth opportunities, we’re able to maintain our full-year guidance. Wireless margins and phone churn continue to run at record levels, our fiber deployment is helping drive broadband growth, and DirecTV Now had another strong quarter.”

AT&T’s 97,000 postpaid phone losses were better than analysts’ estimates of 130,000. Total postpaid churn was 1.07 percent, which is two basis points worse than the same period a year ago.

Prepaid net adds for the three-month period came in well above Wall Street’s estimates at 324,000, leaving AT&T’s prepaid user base 16.1 percent larger year over year.

AT&T reported 3 million total wireless net adds, including 2.3 million additions in the United States and 700,000 in Mexico.

Total wireless revenue was down 4.2 percent year over year and wireless service revenues were down 2.8 percent year over year.

As its core wireless business shrinks, AT&T is hoping it can create an appealing bundle offering with the impending Time Warner acquisition and its DirecTV platform.

“AT&T has bet that adding content to this mix will help stem the decline,” Moffett wrote in a note to investors. “By bundling telecommunications with media, their hope is to create a differentiated service, one that will be stickier for all their businesses. The hard part will be to prove they can do that without simply further discounting what are already heavily discounted services.”

“And, of course, they will also have to ensure that the business they are acquiring doesn’t itself begin to decline,” he added. “Media multiples have compressed sharply over the past year as investors have come to realize that OTT skinny bundles are not nearly so attractive as the old linear model.”

Check out how AT&T’s entertainment side is doing here.

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