We’re joined today by Dominic Jainy, a distinguished IT professional and analyst whose work at the intersection of AI, machine learning, and telecommunications provides a unique lens on corporate strategy. We’ll be delving into AT&T’s recent performance, exploring the powerhouse strategies driving their subscriber growth and their aggressive push to dominate the converged connectivity market. Our conversation will touch on their ambitious fiber expansion, the intricate balance of massive cost-cutting with strategic investment, and the fundamental restructuring of their business to reflect a 5G- and fiber-first future.
With revenues climbing on the back of sustained mobile and fiber subscriber growth, what were the most effective customer acquisition strategies in 2025? Please detail the key metrics you use to measure the success of these initiatives beyond just net additions.
The success in 2025 wasn’t about a single new strategy, but rather the powerful execution of a long-term, focused plan. The results speak for themselves: adding over one million net-new fiber subscribers for the eighth consecutive year and 1.5 million post-paid mobile subscribers for the fifth straight year. This consistency is the real story. The key was doubling down on becoming the “best advanced connectivity provider” and backing it with significant capital. They made what the CEO called “opportunistic strategic investments,” like acquiring spectrum from EchoStar for $23 billion and fiber assets from Lumen for $5.75 billion. These moves weren’t just about adding subscribers; they were about expanding the total addressable market, creating a larger, more fertile ground for future growth in high-margin services. The real metric of success here is the sustained, multi-year momentum, proving the core strategy is not just working but accelerating.
The rate of households bundling fiber and mobile broadband saw a significant annual increase. What practical steps are you taking to drive this convergence rate from 42% toward the 50% goal, and what market shifts are needed to potentially reach 80% long-term?
The primary engine driving this convergence is the aggressive physical expansion of their fiber network. You can’t bundle services you can’t offer. By expanding their fiber footprint, they’re creating more households where a compelling, high-quality bundle is even an option. We saw the “fastest annual increase” in this convergence rate, climbing 200 basis points year-over-year to reach 42%. The immediate, practical step is to keep building. The path from 42% to the 50% goal is paved with more fiber deployments. Reaching a long-term potential of 80% convergence, however, reflects a fundamental market shift. As the CEO noted, historically, when truly compelling bundles existed, market penetration often approached that 80% mark. The belief is that as fiber becomes the standard and the value of a single, seamless provider becomes undeniable, the market will naturally realign toward this kind of super-high adoption.
The plan to expand fiber reach to over 40 million locations involves integrating assets from Lumen and working with the Gigapower joint venture. Could you walk us through the operational playbook for this rapid expansion and discuss the key challenges you anticipate?
The playbook is a powerful three-pronged assault on the market. First, you have their organic buildout. Second, there’s the strategic acquisition of Lumen’s consumer fiber business, which immediately brings in a million subscribers and four million potential sites. Third, and perhaps most innovatively, is the Gigapower joint venture with Blackrock, a 50/50 partnership designed to accelerate fiber-to-the-premise construction. This combination allows them to jump from 32 million locations at the end of 2025 to over 40 million by this year’s end. The plan then calls for adding about five million new locations annually through the decade. The biggest challenge is pure operational complexity. You’re managing three distinct expansion models—internal builds, an external acquisition integration, and a joint venture partnership—all at the same time. Ensuring consistent quality, managing varied supply chains, and integrating different network cultures without dropping the ball on customer experience is a monumental task.
While expanding, the company achieved over $1 billion in cost savings and now targets an additional $4 billion. What specific operational areas are you focusing on for these future savings, and how do you balance cost-cutting with strategic investments in network quality?
The financial discipline here is quite remarkable. They’ve already taken out over $1 billion in costs in 2025 and have a clear line of sight on another $4 billion by 2028. The savings are coming from streamlining legacy operations, particularly as they transition customers off older, more expensive copper-based networks and onto modern fiber and 5G infrastructure. These new networks are inherently more efficient to operate and maintain. The balance comes from viewing cost-cutting and investment not as opposing forces, but as two sides of the same coin. The savings generated from retiring legacy systems are directly reinvested into expanding the higher-quality, higher-margin fiber and 5G networks. This creates a virtuous cycle: improved efficiency funds network expansion, which attracts more high-value customers, further improving financial performance and freeing up more capital for investment. It’s a reinvestment strategy disguised as a cost-cutting program.
We’re seeing a clear shift in enterprise services, with legacy wireline revenue declining while advanced connectivity services grow. How are you managing this transition for business customers, and what are the primary value propositions for migrating them to higher-margin fiber and 5G services?
This is a carefully managed transition from a declining past to a growing future. The numbers tell the story perfectly: a 7.5% drop in overall business wireline sales, driven by a steep 17.5% decline in legacy services. But within that, there’s a bright spot—a 6.8% growth in new fiber and “advanced connectivity” services. The strategy is to proactively migrate business customers, showing them a clear value proposition. For them, it’s not just about speed; it’s about capability. Moving to fiber and 5G enables higher-margin, more sophisticated services like SD-WAN, private networks, and advanced VPNs that are essential for the new AI era. The value proposition is a future-proof network that is more secure, more flexible, and capable of handling the data-intensive applications that modern businesses rely on. They are essentially trading a legacy utility for a strategic business asset.
The company is restructuring its financial reporting to group its core 5G and fiber businesses together. What is the strategic rationale behind this change, and how does it better reflect the converged connectivity strategy you’re pursuing in the market?
This reporting change is more than just accounting; it’s a powerful statement of strategic intent. By grouping the consumer and enterprise 5G and fiber businesses—which account for 90% of revenues—into a single core segment, they are telling the market, “This is who we are now.” It moves the legacy copper-based voice and data services into a separate bucket, clearly defining them as non-core. This new structure perfectly mirrors their go-to-market strategy, which is built entirely around the convergence of fiber and 5G. It provides investors with a much clearer view of the performance of the growth engine of the company, eliminating the noise from declining legacy assets. It’s about focusing all attention, both internally and externally, on the “advanced connectivity” mission.
What is your forecast for the future of converged connectivity services in the U.S.?
My forecast is that convergence will become the undisputed table stakes for any major player in the U.S. telecom market within the next five years. The era of providers succeeding as mobile-only or fixed-line-only specialists at the national level is drawing to a close. Consumers and businesses are increasingly demanding a single, seamless, and reliable connection for every aspect of their digital lives, and they’ll reward the provider who can deliver that with simplicity and quality. We will see an acceleration of market consolidation and partnerships aimed squarely at bridging the gap between fiber and mobile assets. The companies that build the deepest, highest-quality converged networks today will be the undisputed market leaders of tomorrow, commanding greater customer loyalty and superior pricing power.