Company Reports

AT&T's third-quarter service revenue growth accelerated to 3.8%, or about 3% excluding the Lumen fiber acquisition. Service revenue growth had been bounded between 0%-2% over the past three years. Net debt ticked up sharply on spectrum purchases.

We believe AT&T's investment in its fiber and 5G wireless networks has strengthened its competitive position. These investments don't come cheap, however. Maintaining pricing discipline will be crucial to earning attractive returns on capital, but competitive intensity is ratcheting up, with firms pushing to maintain growth as the wireless and broadband markets rapidly mature. We expect rational competition to prevail over the longer term, with only a modest impact from satellite providers like SpaceX. However, irrational competition remains a risk as the shape of the telecom industry changes.

AT&T agreed to sell its Mexican wireless business for $2 billion to a 50/50 joint venture between Grupo Televisa and Fintech Holdings.

Shares of US wireless carriers are trading lower after SpaceX agreed to purchase low-band 800 MHz spectrum licenses from Grain Capital, which Grain recently acquired from T-Mobile. SpaceX also says Starlink will build a terrestrial wireless network to supplement satellite with indoor coverage.

We believe AT&T's investment in its fiber and 5G wireless networks has strengthened its competitive position. These investments don't come cheap, however. Maintaining pricing discipline will be crucial to earning attractive returns on capital, but competitive intensity is ratcheting up, with firms pushing to maintain growth as the wireless and broadband markets rapidly mature. We expect rational competition to prevail over the longer term, with only a modest impact from satellite providers like SpaceX. However, irrational competition remains a risk as the shape of the telecom industry changes.

Shares of US wireless carriers and tower firms traded lower after SpaceX claimed that it will use satellite dishes to build a wireless network capable of competing in the US wireless industry. SpaceX also claimed that it will launch 10 times as many V3 broadband satellites as V2.

AT&T's service revenue increased 2.7% in the second quarter, or about 2% excluding the Lumen fiber acquisition. This was the fastest pace in three years, driven by a jump in revenue per wireless customer. Adjusted EBITDA increased 5%, but management maintained full-year expectations at 3%-4% growth.

We believe AT&T's investment in its fiber and 5G wireless networks has strengthened its competitive position. These investments don't come cheap, however. Maintaining pricing discipline will be crucial to earning attractive returns on capital, but competitive intensity is ratcheting up, with firms pushing to maintain growth as the wireless and broadband markets rapidly mature. We expect rational competition to prevail over the longer term, with only a modest impact from satellite providers like SpaceX. However, irrational competition remains a risk as the shape of the telecom industry changes.

Verizon was the big bidder in Auction 113, spending $3.2 billion on 82 spectrum licenses. T-Mobile picked up more than 100 licenses, nearly all in small markets, for only $277 million. AT&T added 13 licenses for $133 million. SpaceX did not bid aggressively, landing two licenses for $8 million.

Bidding in FCC Auction 113 has concluded, placing licenses that have been dormant since EchoStar subsidiary Dish Network failed to pay for them more than a decade ago. The auction resolves the related dispute between the FCC and EchoStar. We should know the winning bidders in the coming days.

AT&T's revenue grew 2.9% in the first quarter, as wireless phone sales again jumped and the acquired Lumen business made a small contribution. Margins and cash flow were weaker than a year ago due to seasonal and one-time items. Management maintained expectations for the year.

We believe AT&T's investment in its fiber and 5G wireless networks has strengthened its competitive position. These investments don't come cheap, however. Maintaining pricing discipline will be crucial to earning attractive returns on capital, but competitive intensity is ratcheting up, with firms pushing to maintain growth as the wireless and broadband markets rapidly mature. We expect rational competition to prevail over the longer term, with minimal impact from new technologies like satellite. However, irrational pricing and promotion — more likely from rivals than from AT&T — remains a risk as the shape of the telecom industry changes.

AT&T's fourth-quarter revenue jumped 3.6%, the best pace in four years, primarily on higher smartphone sales. The firm also outlined expectations through 2028, calling for consistent service revenue growth, with improving margins and free cash flow generation.

AT&T delivered 1.6% third-quarter revenue growth, decelerating from the first half of the year due to weakening wireless growth. Gradual adjusted EBITDA margin expansion continues as AT&T eliminates legacy costs, especially in fixed-line segments. Management maintained its full-year outlook.

We believe AT&T's investment in its fiber and 5G wireless networks has strengthened its competitive position. These investments don't come cheap, however. Maintaining pricing discipline will be crucial to earning attractive returns on capital, but competitive intensity is ratcheting up, with firms pushing to maintain growth as the wireless and broadband markets rapidly mature. We expect rational competition to prevail over the longer term, with minimal impact from new technologies like satellite, but the next couple of years could be bumpy.

AT&T will acquire 600 MHz and 3.45 GHz wireless licenses from EchoStar for up to $23 billion. Regulatory approval is far from certain, but we believe approval is more likely than not.

AT&T's second-quarter revenue increased 3.5% from a year ago, the best pace in several years. Increased sales of wireless phones and growth in fiber broadband drove this result. Management roughly maintained its free cash flow target for 2025 despite expected tax savings from recent legislation.

We believe AT&T's efforts to invest in its fiber network and expand 5G wireless coverage have strengthened its competitive position. While the wireless and broadband markets are mature and will likely only deliver modest growth, we expect cash flow will remain strong, funding the dividend and allowing flexibility to invest or return more capital to shareholders.

AT&T plans to acquire Lumen's mass-market fiber network, which reaches about four million homes and serves one million broadband customers, for $5.75 billion. Lumen will retain its old copper phone networks and customers, including central office real estate.

AT&T delivered accelerating revenue growth during the first quarter, as wireless and broadband customer additions remain solid. Total revenue increased 2.0% versus a year ago, with wireless service revenue up 4.1%, the fastest pace since early 2023. Residential broadband revenue was up 9%.