T Sees Significant Gains From Robust Communications Expansion: Can This Momentum Continue?

AT&T's Communications Segment Shows Robust Growth

AT&T Inc. (T) continues to experience strong performance within its Communications division. In 2025, revenue for this segment climbed to $120.89 billion, up from $117.7 billion in 2024, fueled by several key growth factors.

For the fifth year in a row, AT&T achieved over 1.5 million net additions in postpaid customers. The company also maintained its momentum in wireless market share, particularly in fiber-served areas, demonstrating the effectiveness of its convergence strategy. By offering multiple services under one provider, AT&T increases customer loyalty and reduces churn, as switching becomes less attractive. The company’s pricing strategy remains steady and focused, aiming to enhance average revenue per user (ARPU) through bundled offerings rather than simple price increases.

In 2025, AT&T recorded more than 1 million net fiber additions and 875,000 new Internet Air customers. The fourth quarter alone saw 283,000 new fiber subscribers. By year-end, fiber passings reached 32 million, with projections to surpass 40 million in 2026.

The acquisition of Lumen has significantly broadened AT&T’s fiber internet coverage across 32 states, adding over one million fiber subscribers and more than four million fiber-enabled locations. This move strengthens AT&T’s ability to deliver integrated fiber broadband and 5G wireless services, further supporting its convergence approach. Additionally, EchoStar’s spectrum acquisition and deployment have greatly enhanced AT&T’s 5G network capabilities.

AT&T’s consumer wireline revenue increased to $14.2 billion in 2025, up from $13.6 billion in 2024. Mobility revenue also grew, reaching $89.5 billion compared to $85.3 billion the previous year.

Competitive Landscape

AT&T faces intense competition from Verizon Communications Inc. (VZ) and T-Mobile US Inc. (TMUS) in the telecommunications sector.

Verizon’s consumer segment saw a 3.8% year-over-year increase in revenue, reaching $106.807 billion in 2025, driven by growth in both services and wireless devices. However, its business segment experienced a decline. Verizon is also expanding its fiber network nationwide through acquisitions and infrastructure investments.

T-Mobile continues to lead the industry in postpaid customer growth. In the fourth quarter, TMUS added 2.4 million postpaid net customers and 261,000 postpaid net accounts. For 2025, T-Mobile reported 7.8 million postpaid net customer additions, including 3.3 million postpaid phone net adds. The company’s service revenue totaled $71.3 billion for the year.

AT&T Stock Performance, Valuation, and Outlook

Over the past year, AT&T shares have risen by 2.1%, while the Wireless National industry experienced a 5.2% decline.

Source: Zacks Investment Research

AT&T’s forward price-to-earnings ratio stands at 11.79, which is below the industry average of 13.09.

Source: Zacks Investment Research

Analysts have raised their earnings forecasts for AT&T for both 2025 and 2026 over the past two months.

Source: Zacks Investment Research

Currently, AT&T holds a Zacks Rank #3 (Hold). For a full list of Zacks #1 Rank (Strong Buy) stocks, click here.

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Original article published by Zacks Investment Research

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