Keep Calm; Solid T Results, Bigger Buyback

Research evidence excerpt

Keep Calm; Solid T Results, Bigger Buyback

IdeaMFor more on our industry views, see Telecom & Cable Services: Making Space for

Starlink, TMUS Remains Top Pick (7 Jul 2026).

Investment Summary: AT&T reported strong results, which featured strength in

Wireless (best account growth in >3 years at +147K) with better phone nets, lower

churn and improved ARPU, while Fiber adds were ahead (best ever 2Q Fiber adds)

vs FWA adds decelerating (directionally expected as expanding Fiber footprint).

Fiber ARPU was down ~1% y/y with the full impact of the Lumen Mass Markets

integration (where the converged rate rose to 45% in June), ex-LUMN Fiber ARPU

was flat y/y, while they have levers including managing back book pricing. The

results underscore the thesis that Fiber is the best tech with the lowest marginal

cost that can offer symmetrical gigabit services, while the go-to-market strategy is

clearly resonating as they move to attack more value segments down market that

are incremental to their premium base. T added >1mn Fiber locations in 2Q and

accelerated the pace of deployment, which contributed to higher capital investment

of $6.1bn. FCF will be relatively stable/flat in 3Q, with stronger y/y growth in 4Q,

while FY26 FCF is unch’d at $18bn+. T continues to see benefits from their cost

transformation initiatives and remains on-pace to achieve $4bn in consolidated

annual cost savings by YE28. They continue to make progress on the copper

decommissioning (legacy / bad bank) where they have approval to discontinue

legacy services in >30% of wire centers, which will be effective by late 2026, which

should help the cost structure and further streamline operations.

98% of Traffic: AT&T underscored that they own & operate ~98% of traffic that