AT&T said declines in legacy wireline services and consumer mobility were the primary reasons its third quarter revenue was down 2.9% versus the year-ago quarter. The telecom giant reported revenue of a $39.7 billion, versus $40.9 billion last year.

Total wireless revenue was down 4.2% year-on-year to $17.4 billion, while wireless service revenue fell 2.8% to $14.5 billion. AT&T said wireless equipment revenue tumbled 10.3% as consumers chose to hold onto their smartphones instead of upgrading.

AT&T’s wireless revenue is split between the company’s consumer mobility unit and its business solutions unit. Wireless revenue was basically flat in the business solutions group, but consumer mobility saw wireless revenue slide 6.3% year-on-year, coming in at $7.7 billion for the third quarter.

The company ended the quarter with a total of 59.3 million postpaid smartphone customers. Its consumer mobility unit lost 287,000 postpaid wireless subscribers, while the business solutions group added 301,000. AT&T has almost twice as many postpaid subscribers in its business solutions group as it has in its consumer mobility unit.

Declines in AT&T’s wireline business impacted the company’s business solutions group and its entertainment division. AT&T said revenue from its business solutions group fell 4% year-on-year to $17.1 billion, with revenue from legacy voice and data services down 15% to was $3.4 billion. The company said revenue was also down slightly for its entertainment group, with DSL, U-Verse and DIRECTV all reporting subscriber losses, while DIRECTV NOW added subscribers.

International operations provided the good news in AT&T’s third quarter release, reporting an 11.7% increase in revenue versus the year-ago quarter. AT&T’s international operations reported $2.1 billion in quarterly revenue, $1.3 billion of which came from video entertainment.

AT&T’s capital expenditures for the third quarter were $5.25 billion, down 10% year-on-year, but up slightly from the second quarter of 2017. The company did not say what portion of capital expenditures were dedicated to its wireless network. AT&T’s capital expenditures are divided between its wireless network, its wireline network and DirecTV.

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