AT&T’s convergence strategy is working as per its 3Q 2025 earnings report
AT&T reported a 1.6% increase in third-quarter revenue to $30.7 billion, driven by its convergence strategy which combines wireless and fiber services. This strategy attracted profitable customers, as evidenced by 405,000 postpaid phone net additions and 550,000 new subscribers for AT&T’s advanced broadband services, including Fiber and Internet Air. The growth in these areas offset a decline in business wireline revenue.
“We have the key building blocks in place to give our customers the best connectivity experience in the industry and we’re winning the race to lead in convergence,” said John Stankey, AT&T Chairman and CEO.
“We continue to add highly-profitable customers that are choosing AT&T for all their connectivity needs on the country’s fastest and largest wireless and fiber networks. It’s clear our differentiated investment-led strategy is working, and we remain on track to achieve all of our 2025 consolidated financial guidance.”
Here are a few AT&T 3Q 2025 highlights:
- Postpaid Phone Subscribers: Gained 405,000 net additions.
- AT&T Fiber: Added 288,000 new subscribers.
- AT&T Internet Air: Added 270,000 new subscribers, marking a strong quarter for broadband net additions overall.
- Total Revenue increased 1.6% year-on-year to $30.7 billion.
- Mobility Revenue grew 3.1% year-over-year, supported by higher equipment sales and subscriber additions.
- Latin America Revenues were up 7.1% year on year to USD 1.10 billion amid subscriber and ARPU growth, higher equipment sales and the favourable effects of foreign exchange rates.
- Consumer Wireline Revenue increased 4.1%, led by an 8.2% rise in broadband revenue and strong fiber growth.
- Business Wireline Revenue declined 7.8%, mainly due to reductions in legacy services, though this was partially offset by growth in fiber and advanced connectivity services.
- The strategy is working because customers who bundle fiber and wireless services have lower churn and higher lifetime values, according to AT&T CEO John Stankey.
- More than 41% of AT&T Fiber households also have an AT&T Mobility service, which shows the success of this strategy.
- The company is on track to achieve its consolidated financial guidance for the year.
Stankey on AT&T’s competitive advantage (from Earnings Call transcript):
“We offer fast and reliable connectivity for 5G and fiber at attractive price points. More people are choosing AT&T for both wireless and home internet services. Today, more than 41% of AT&T Fiber households also choose AT&T for wireless. And the pace of this convergence trend within our customer base continues to grow. These customers remain our most valuable, with the lowest churn profile and highest lifetime values.
Our success with convergence also extends to fixed wireless. More than half of our Internet Air subscribers also choose AT&T for their wireless service. Similar to fiber, these customers exhibit lower churn and drive higher lifetime values than customers with stand-alone services.
The EchoStar spectrum we agreed to acquire will improve our 5G wireless performance in a cost-efficient manner, while allowing us to grow Internet Air at a faster pace. We’re already making great progress, delivering on our commitment to deploy this valuable spectrum for the benefit of American consumers and businesses.
We started deploying the 3.45 GHz spectrum that we have agreed to acquire from EchoStar under a short-term spectrum manager lease. Based on our current rate and pace, we expect these mid-band licenses will be deployed in cell sites covering nearly two-thirds of the US population by mid-November.
This should position us to further expand the availability of Internet Air 5G FWA) in our sales channels in 2026. Our ability to move this quickly reflects the great work of our teams and the FCC’s pro-investment and supportive policy environment. We’re also making great progress in preparing to close our transaction with Lumen. Most of the senior leadership team has been identified, and we now expect to close this transaction in the early part of 2026.
As I’ve said before, where we have fiber, we win with both fiber and 5G, and we plan to win even more as our investments in these assets bring advanced connectivity to more Americans. The supportive (FCC) policy environment is also making it easier for us to transition away from outdated legacy infrastructure and invest in the AI-ready connectivity that Americans want and need.
The bottom line is that we now have the right building blocks in place to realize our scaled fiber and fixed wireless ambitions, complete our wireless modernization, and successfully transition away from legacy infrastructure. As we complete our key investments, acquisitions, and transformation initiatives, we expect to increase our fiber and convergence penetration rates and see a majority of incremental revenue growth originate from converged customer relationships.”
Outlook & Financial Guidance:
AT&T reiterated its guidance for the 2025 financial year, with service revenue growth in the low single-digit range and mobility service revenue growth of 3 percent or better. It still foresees consumer fibre broadband revenue growth in the mid-to-high teens. Annual adjusted EBITDA growth should be 3 percent or better. Mobility EBITDA growth will be about 3 percent. Business wireline EBITDA will decline at a low double-digit rate and EBITDA growth for consumer wireline is still forecast in the low to mid-teen range. FY capital investment will be in the USD 22 billion to USD 22.5 billion range. AT&T predicts free cash flow in the low-to-mid USD 16 billion range. It continues to forecast FY adjusted EPS of USD 1.97 to USD 2.07.
AT&T reiterated its long-term financial guidance of service revenue growth in the low-single-digit range annually from 2026-2027, adjusted EBITDA growth of 3 percent or better annually, and adjusted EPS accelerating to double-digit percentage growth in 2027. AT&T foresees capital investment in the range USD 23 billion to USD 24 billion annually from 2026-2027. It predicts free cash flow of USD 18 billion or more in 2026 and USD 19 billion or more in 2027.
References:
https://about.att.com/story/2025/3q-earnings.html
https://www.telecompaper.com/news/att-says-convergence-boosts-q3-revenue-and-profitability–1551778
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