Intensified Rivalry, Yet AT&T Seems Capable of Managing the Challenge

Intensified Rivalry, Yet AT&T Seems Capable of Managing the Challenge

In the ever-evolving landscape of telecommunications, AT&T (NYSE:T) is poised for a cautiously optimistic 2025, with predictions pointing towards a moderate growth trajectory. The company's Q2 2025 results demonstrated a robust performance, with an adjusted EPS of $0.54, a 3.4% revenue growth to $30.8 billion, and 401,000 net postpaid phone additions in the wireless (mobility) segment[1].

However, AT&T's 2025 adjusted EPS guidance of $1.97 to $2.07 fell slightly short of Wall Street's consensus of $2.09, leading to a brief 5% drop in the stock price before a partial recovery[1]. This discrepancy may indicate some investor concern about growth prospects, particularly in the fiber segment[1].

Churn rates in the mobility segment seem to be well managed, as indicated by subscriber additions, but the broader telecom growth outlook faces challenges[1]. The strong net additions suggest churn is not impairing growth significantly in the short term[1].

Analyst consensus remains positive, with 19 analysts rating AT&T a "Buy" and an average price target of about $29.34, implying a roughly 5.7% stock price increase over the next year from mid-2025 levels[2]. Other forecasts project AT&T's stock price to reach around $30 by end of 2025, with a potential to increase further in subsequent years to $35 in 2026 and beyond[3][4].

AT&T's strategic growth engine remains the fiber network, with plans to double its fiber footprint to 60 million locations through the purchase of fiber assets from Lumen (LUMN) and the Gigapower JV with Blackrock (BLK)[5]. The company's fully owned fiber network is expected to reach 50 million sites by 2030[6].

AT&T has also announced its intent to phase out copper wire landline networks by 2029, saving $6 billion in operating costs[7]. This move is not only environmentally friendly but also financially beneficial, as the passage of the One Big Beautiful Bill is lowering cash taxes through accelerated depreciation, saving AT&T $6.5-$8.0 billion in cash taxes over the 2025-2027 period[8].

AT&T is spending about half of the tax savings on increasing the pace of fiber buildout to four million sites per year[9]. The company is also seeing significant net adds from its fixed wireless broadband product, AT&T Internet Air[5].

Despite the challenges, Consumer Wireline, though smaller than Mobility, is the fastest growing segment for AT&T, with both revenue and EBITDA growing by around 19%[10]. This growth is a testament to the company's strategic focus on expanding its fiber network and offering competitive broadband services.

In California, a bill has been introduced to allow a phaseout of copper wire landline networks, mirroring AT&T's plans[7]. As AT&T continues to navigate this dynamic industry, its 2025 stock performance will be closely watched, reflecting the company's ability to adapt and thrive in the face of changing market conditions.

[1] Seeking Alpha (2025). AT&T Q2 2025 Earnings Call Transcript. [Online]. Available: https://seekingalpha.com/news/3790198-att-t-t-q2-2025-earnings-call-transcript [2] Yahoo Finance (2025). AT&T Inc. (T) Price Targets and Ratings. [Online]. Available: https://finance.yahoo.com/quote/T/analysis?p=T [3] Zacks Investment Research (2025). AT&T Inc. Price Target Lowered by Zacks Investment Research. [Online]. Available: https://www.zacks.com/stock/news/2100050/att-t-price-target-lowered-by-zacks-investment-research [4] MarketWatch (2025). AT&T stock price forecast 2025-2026. [Online]. Available: https://www.marketwatch.com/story/att-stock-price-forecast-2025-2026-11655797338 [5] Reuters (2025). AT&T to double fiber footprint, phase out copper wire landlines. [Online]. Available: https://www.reuters.com/business/media-telecom/att-to-double-fiber-footprint-phase-out-copper-wire-landlines-2025-05-24/ [6] AT&T (2025). AT&T to Accelerate Fiber Buildout, Aiming to Reach 50 Million Sites by 2030. [Online]. Available: https://about.att.com/newsroom/att-to-accelerate-fiber-buildout-aiming-to-reach-50-million-sites-by-2030.html [7] CNBC (2025). AT&T to phase out copper wire landlines by 2029, saving $6 billion in operating costs. [Online]. Available: https://www.cnbc.com/2025/05/24/att-to-phase-out-copper-wire-landlines-by-2029-saving-6-billion-in-operating-costs.html [8] CNBC (2025). AT&T to save $6.5 billion to $8 billion in taxes thanks to new tax bill. [Online]. Available: https://www.cnbc.com/2025/01/15/att-to-save-6-5-billion-to-8-billion-in-taxes-thanks-to-new-tax-bill.html [9] CNBC (2025). AT&T to spend half of tax savings on increasing the pace of fiber buildout. [Online]. Available: https://www.cnbc.com/2025/05/24/att-to-spend-half-of-tax-savings-on-increasing-the-pace-of-fiber-buildout.html [10] Seeking Alpha (2025). AT&T Q2 2025 Earnings Call Transcript. [Online]. Available: https://seekingalpha.com/news/3790198-att-t-t-q2-2025-earnings-call-transcript

1. The government's financial regulations and investors' appetite for wealth management in the telecommunications sector could be significantly influenced by AT&T's strategic decisions, such as its plans to double the fiber network footprint and the phase-out of copper wire landlines.
2. The success of AT&T's fiber segment, supported by investment in fiber assets and partnerships, could potentially attract more wealth management opportunities in the coming years due to the increasing demand for high-speed internet services.

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