T Accelerates Fiber Network Expansion: Will it Boost Competitive Edge?
AT&T, Inc. T recently announced that its fiber broadband network has reached 30 million consumer and business locations across the United States. The major milestone was realized ahead of schedule. This is a major step toward achieving its long-term goal of 60 million fiber locations by 2030. AT&T's industry-leading fiber capabilities and steady investment in fiber infrastructure have become key enablers of economic growth and innovation in several sectors, including healthcare and education. During 2020-2024, the company has invested $145 billion in wireline and wireless network expansion.
Since 2020, AT&T has aggressively expanded its fiber locations and added 5.7 million fiber customers. To expand its fiber footprint, the company has taken a multi-dimensional approach, which includes growing and improving its in-region fiber network, public-private partnerships, commercial open access agreements and strategic acquisitions. The acquisition of Lumen's fiber business will add 1 million fiber customers and 4 million fiber locations across 11 U.S. states.
Its customer-oriented approach is a major advantage. It's the first and only carrier in the industry to introduce a customer guarantee for both wireless and fiber networks. AT&T Guarantee offers proactive bill credits to customers in case of fiber downtime lasting 20 minutes or more and wireless downtime lasting 60 minutes or more. Multi-gigabit speed, built-in security, optimal in-home coverage and availability of integrated fiber and 5G connectivity plans are enhancing customer experience.
With its strong network architecture expertise, size and scale, cost-effective growth path and an agile go-to-market approach, the company is expected to gain a substantial customer base in the upcoming years. In the first quarter of 2025, AT&T added 261,000 fiber customers. Per our estimate, fiber net adds are expected to reach 1,048,000 by the end of 2025, indicating 2.4% year-over-year growth.
How Are Competitors Faring?
AT&T faces competition from Verizon Communications, Inc. VZ and Charter Communications CHTR in the fiber broadband space. Verizon Fios has a strong presence in the Northeast U.S. states, offering high-speed Internet and TV services. In the first quarter, the company recorded 41,000 Fios Internet net additions as high demand for reliable fiber optic broadband was spurred by higher video consumption. Through the acquisition of Frontier Communications, Verizon is set to gain access to Frontier's 2.2 million fiber subscribers across 25 states. This will significantly expand Verizon's fiber footprint.
Charter Communications has a strong nationwide presence. The company has undertaken a multi-year rural construction initiative, investing $7 billion in this program. The program intends to add an additional 100,000+ miles of fiber-optic network infrastructure and provide symmetrical, multi-gigabit speed across 1.7 million new locations. Such initiatives will significantly bolster Charter's competitive edge.
T's Price Performance, Valuation and Estimates
AT&T has gained 61.4% over the past year compared with the Wireless National industry's growth of 31.8%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company's shares currently trade at 13.25 forward earnings, lower than 13.65 of the industry but above its mean of 10.36. It carries a Value Score of B.
Image Source: Zacks Investment Research
AT&T is currently witnessing a downtrend in estimate revisions. Earnings estimates for 2025 have declined 3.27% to $2.07 over the past 60 days, while the same for 2026 has decreased 0.88% to $2.24.
Image Source: Zacks Investment Research
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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AT&T Inc. (T): Free Stock Analysis Report
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