(Reuters) -Verizon raised the lower end of its annual profit forecast on Monday, as strong demand for its higher-tier plans powered better-than-expected earnings in the second quarter.

Shares of the U.S. telecom major rose 4% in premarket trading.

The company posted a 2.2% rise in wireless service revenue as more users opted for its add-ons such as access to streaming service like Netflix ( NFLX ).

The carrier has launched price-lock promotions and broadband-wireless bundles to retain users as competition intensifies from AT&T ( T ) and T-Mobile, as well as aggressive offers from broadband providers Comcast ( CMCSA ) and Charter.

However, Verizon posted a surprise drop of 9,000 monthly bill-paying wireless subscribers in the April-June period, reeling from user churn after price hikes in January. Analysts polled by FactSet were expecting an increase of 13,000 subscribers.

To drive growth in the mature U.S. telecom market, Verizon and its wireless rivals have been bulking up on fiber-optic assets that can tap growing data use by customers.

Verizon in May won approval from the U.S. telecom regulator for its $20 billion acquisition of fiber-optic internet provider Frontier, after it agreed to end its diversity programs.

The sharper focus on internet services helped it posted 293,000 broadband net additions in the second quarter.

Overall, Verizon reported revenue of $34.5 billion, beating estimates of $33.74 billion, according to data compiled by LSEG. Its quarterly adjusted earnings per share of $1.22 also beat estimates.

The company now expects 2025 adjusted profit to grow between 1% and 3%, compared with 0% to 3% previously. It also raised its annual free cash flow forecast to between $19.5 billion and $20.5 billion, from $17.5 billion to $18.5 billion.

(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur)