Verizon Communications Inc reported a better-than-expected rise in quarterly profit as more users signed up for its postpaid wireless services and subscriber defections fell to a three-year low.

The biggest U.S. wireless service provider added 1.1 million wireless retail postpaid subscribers – those who pay each billing cycle based on usage – on a net basis in the second quarter, in line with estimates from analysts polled by market research firm FactSet StreetAccount.

Customer defections, also known as churn in the telecommunications industry, for Verizon’s wireless postpaid business dipped to 0.90 percent versus the 0.99 percent estimated by FactSet.

Revenue from Verizon’s FiOS high-speed Internet, TV and phone service rose 10 percent to $3.4 billion, while tablet sign-ups totaled 852,000 in the quarter.

Wireless carriers have been offering heavy promotions and discounts on tablets as they look to boost crucial subscriber growth numbers and limit customer churn.

Verizon is gearing up to launch its online video service to unlock new revenue streams as competition in the wireless industry from smaller players such as T-Mobile US Inc and Sprint Corp heats up.

The company bought AOL Inc in June in a $4.4 billion bet that a push into mobile video and targeted advertising can help it find new growth avenues.

Verizon said it added 842,000 4G smartphones to its postpaid customer base in the quarter.

Net income attributable to Verizon was $4.23 billion, or $1.04 per share, in the second quarter ended June 30, compared with $4.21 billion, or $1.02 per share, a year earlier.

Revenue rose to $32.22 billion from $31.48 billion.

Analysts on average had expected earnings of $1.01 per share on revenue of $32.45 billion, according to Thomson Reuters I/B/E/S.

(Reporting By Devika Krishna Kumar and Lehar Maan in Bengaluru; Editing by Saumyadeb Chakrabarty)

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