AT&T CEO John Stankey set a bullish tone for 2026 at the UBS Global Media & Communications Conference, arguing that the carrier is executing “right on the mark” against the strategy it laid out a year ago. He said AT&T expects 2025 EBITDA growth above its 3% target, highlighted tighter cost control and operating efficiency, and pointed to leverage moving into the 2.5x net debt-to-EBITDA range alongside roughly $4 billion of share repurchases this year. Recent moves to acquire Lumen’s fiber assets in key Western markets and expand its relationship with EchoStar fit within the capital allocation framework AT&T outlined at its Analyst Day, according to Stankey, and are designed to strengthen both the wireless and broadband franchises without breaking prior guidance commitments.
On wireless, Stankey described a “multi-dimensional” competitive landscape in which price, network quality, convergence, and customer experience all matter, rather than a single lever such as cheapest tariffs or “best network” claims. AT&T is leaning into value segments, senior communities, and SMBs, accepting some moderation in wireless ARPU as it prioritizes high-value converged accounts that take both mobile and fixed services. He said the company is accelerating digitalization across distribution and customer care, with more transactions fulfilled online, and is preparing new digital experiences for early 2026 as it retools its store footprint and supply chain. AT&T also expects its 3.45 GHz spectrum deployment and broader wireless modernization, including C-band upgrades and the EchoStar arrangement, to lift fixed wireless and handset speeds while creating more room to place its Internet Air product selectively where it complements—not replaces—its fiber footprint.
Stankey emphasized that AT&T remains “fiber-first,” targeting more than 60 million locations over the next several years and citing data that show wireless share is roughly 500 basis points higher in markets where the company also sells fiber. Convergence is already approaching 42% within AT&T’s fiber base, and the Lumen transaction adds underpenetrated fiber territories in states such as Washington, Colorado, Arizona, Utah, and Minnesota, which are currently some of AT&T’s weakest wireless markets. He also reiterated the company’s plan to exit legacy copper and TDM services by the end of the decade, aiming to unlock about $6 billion of cost savings as it decommissions offices, retires systems, and salvages copper to offset migration costs. While he sees LEO satellite systems as a complementary tool for IoT and global assets, he argued that terrestrial mobile plus fiber will retain an edge for mainstream handset and AI-era upstream traffic. Once peak capex on wireless and fiber passes later in the decade, Stankey expects AT&T’s capital intensity to drift back toward the mid-teens and free up additional cash for investors and targeted reinvestment.
• AT&T expects 2025 EBITDA growth above its “3% or better” target, supported by tighter cost control, operating efficiency, and disciplined capital deployment.
• Leverage is tracking to roughly 2.5x net debt-to-EBITDA, and AT&T plans to complete $4 billion in share repurchases this year, ahead of the pace it initially signaled at its Analyst Day.
• Recent portfolio moves—including acquiring Lumen’s fiber assets and expanding its EchoStar arrangement—are designed to stay consistent with prior guidance while strengthening AT&T’s network position and future growth profile.
• Stankey described wireless competition as “not one-dimensional,” stressing that success now depends on a balanced execution across network performance, pricing, converged offers, and customer experience.
• AT&T is deliberately tilting toward value segments, senior communities, and SMBs, accepting some moderation in wireless ARPU when it drives higher overall EBITDA and cash through converged fixed–mobile relationships.
• The company plans to adjust its external KPIs and disclosures for 2026 to better reflect a converged business model, focusing more on service revenues and margins across the customer base rather than standalone wireless metrics.
• Digitalization of sales and support is a major focus: AT&T has reworked its distribution mix for several years and will roll out more online-first acquisition and upgrade journeys in 2026, designed to reduce friction and lower lifecycle costs.
• On fixed wireless, AT&T remains “fiber-first” but expects its 3.45 GHz deployment to increase fixed wireless speeds by more than 50% and handset speeds by around 80%, supported by broader modernization across 60%+ of its footprint.
• AT&T does not plan to “chase volume” in fixed wireless; instead, it aims to use Internet Air selectively for business and consumer segments where the product has strong economics and can be paired with mobile in non-fiber areas.
• Where AT&T offers both fiber and wireless, its mobile share is about 500 basis points higher than in non-fiber markets, and convergence is approaching 42% within the fiber footprint, underpinning its 60M+ locations fiber strategy.
• The Lumen fiber acquisition brings underpenetrated territories in states where AT&T’s wireless share is relatively low, and AT&T expects branding, distribution, and converged offers to lift both fiber penetration and mobile share in those markets.
• AT&T plans to expand fiber builds by more than 4 million locations per year when combining its existing footprint with new build-out in Lumen territories, aided by supply chain scale and vendor volume to manage unit build costs.
• Stankey acknowledged that some new fiber builds cost more per passing than early aerial, dense deployments, but argued that higher penetration, better demographics, and incremental wireless share support attractive returns.
• Lifecycle economics—lower truck rolls, improved customer acquisition, and simpler operations on all-fiber networks—are central to AT&T’s case for long-term margin expansion as the fiber base scales.
• AT&T intends to exit legacy copper and TDM services by the end of the decade, with about one-third of central offices already in the regulatory process toward shut-down and the first office fully closed.
• The company estimates roughly $6 billion in remaining costs associated with legacy networks; about 40% is variable and 60% is fixed/shared, with the latter becoming addressable as the “last office” and systems are decommissioned.
• Copper recovery and resale are expected to help offset the cost of migration, while new fiber and wireless “catch products” provide continuity for customers as legacy services wind down.
• Stankey views LEO satellite networks as complementary to terrestrial infrastructure, particularly for IoT and globally mobile assets like shipping, but not as a like-for-like replacement for dense terrestrial mobile usage.
• He cited indoor coverage, upstream capacity needs in an AI-driven world, and basic spectrum geometry as enduring advantages for terrestrial networks anchored in fiber and low-band spectrum.
• AT&T expects capital intensity to remain elevated as it completes its fiber program over the next few years, then trend back toward the mid-teens percentage of revenue later in the decade, freeing up more cash for shareholders.
• The company sees its long-term differentiator as a converged franchise built on “fantastic wireless assets” plus a scaled fiber footprint and a growing base of sticky converged customers.
“ We’re building a franchise for the converged industry that is coming, that is going to be incredibly well positioned with fantastic wireless assets, fantastic fixed assets, and a customer base that will be unparalleled,” said John Stankey, Chairman and CEO of AT&T.
🌐 Analysis
AT&T is doubling down on a fiber-led convergence strategy at a time when U.S. wireless competition is intensifying and alternative access models—from cable to LEO satellites—are testing the traditional telco playbook. The combination of the Lumen fiber footprint, EchoStar network enhancements, copper shutdown, and new disclosure practices around converged economics sets AT&T up to compete not just on headline net adds, but on customer lifetime value and margin structure versus peers like Verizon and T-Mobile as AI-era traffic patterns drive higher upstream and in-building demands.
