AT&T added fewer fiber customers than expected in the second quarter, stoking concerns about intense competition and eclipsing a surge in wireless subscribers fueled by its discounted bundles.
AT&T has doubled down on its push into high-speed internet, a segment traditionally dominated by broadband giants like Comcast, to counter slowing growth and heightened promotional activity by wireless rivals Verizon and T-Mobile.
Texas-based AT&T added 243,000 fiber customers in the second quarter, fewer than 250,610 expected by analysts at Visible Alpha. The company added 261,000 customers during the January-March period.
The company said it expects the acquisition of Lumen’s mass markets fiber business, set to close in the first half of 2026, to propel it to more than 60 million fiber locations by the end of 2030.
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AT&T also disclosed plans to invest about $3.5 billion from savings unlocked by the new tax law to accelerate its fiber network build-out, a critical growth area as the wireless market saturates and internet usage surges.
The tax law allows companies to immediately write off the full cost of certain new equipment and boosted annual forecast at Verizon on Tuesday.
AT&T expects to save $6.5 billion to $8 billion in cash taxes through 2027 under the new tax reforms, and now projects free cash flow to be about $1 billion higher than previously forecast for both 2026 and 2027.
The bundled plans helped the company add 401,000 net monthly bill-paying wireless phone subscribers in the second quarter, flying past FactSet estimates of 295,700. Rival Verizon lost 9,000 customers during the same period.
It reported revenue of $30.8 billion, beating estimates of $30.50 billion, according to data compiled by LSEG. Adjusted earnings per share of 54 cents also surpassed expectations of 51 cents.
Mobility revenue grew 6.7%, driven by subscriber gains and higher wireless device sales volumes.
– Reporting by Harshita Mary Varghese for Reuters