T Benefits From Strong Communications Growth: Will it Sustain?

AT&T, Inc. T is witnessing solid momentum in the Communications segment. During 2025, segment revenues rose to $120.89 billion, up from $117.7 billion in 2024. There are multiple growth drivers in this segment.

In 2025, the company reported more than 1.5 million postpaid net adds. This is the fifth consecutive year with more than 1.5 million net adds. It reported continued wireless share gains in fiber markets. This confirms that AT&T’s convergence strategy is paying off well. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. This higher switching friction lowers churn rate and boosts customer retention. It is taking a consistent and disciplined approach to pricing. It focuses on improving ARPU by offering converged solutions rather than just price hikes.

In 2025, AT&T’s fiber net additions were more than 1 million, with Internet Air customer additions of 875,000. It added 283,000 fiber customers during the fourth quarter. Fiber passings were 32 million at the end of 2025 and set to cross 40 million in 2026.

The completion of the Lumen acquisition has further expanded its fiber Internet presence across 32 U.S. states. It has added more than one million fiber subscribers to AT&T and over four million fiber-enabled locations. The acquisition also bolsters AT&T’s capability to offer integrated fiber broadband and 5G wireless services, supporting its convergence strategy. EchoStar’s spectrum acquisition and deployment have significantly bolstered 5G network capabilities.

In 2025, AT&T’s consumer wireline business revenue rose to $14.2 billion from $13.6 billion in 2024, while mobility revenues increased to $89.5 billion from $85.3 billion in 2024.

How Are Competitors Faring?

The company faces stiff competition from Verizon Communications, Inc. VZ and T-Mobile US, Inc. TMUS in the telecom market. 

In 2025, Verizon’s Consumer revenues were up 3.8% year over year to $106.807 billion, driven by growth in both services and wireless equipment. However, Verizon’s business revenues declined. The company is also actively expanding its fiber footprint nationwide with strategic acquisitions and network expansion.

T-Mobile is benefiting from industry-leading postpaid customer growth. During the fourth quarter, TMUS added 2.4 million postpaid net customers and 261,000 postpaid net accounts. In 2025, T-Mobile added 7.8 million postpaid net customers. Postpaid phone net customer additions were 3.3 million. The company reported service revenues of $71.3 billion in 2025.

T’s Price Performance, Valuation & Estimates

AT&T stock has gained 2.1% over the past year against the Wireless National industry’s decline of 5.2%.

Going by the price/earnings ratio, the company’s shares currently trade at 11.79 forward earnings, lower than the industry’s 13.09.

Earnings estimates for 2025 and 2026 have moved upward in the past 60 days.

AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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