AT&T Inc. (T): Business Model Canvas [Dec-2025 Updated]

You're looking past the headlines to see where the real money is being made at AT&T Inc. after years of restructuring, and the current strategy is crystal clear: aggressive, high-speed connectivity wins. The Q3 2025 data confirms this laser focus, showing them spending between $\mathbf{\$22}$ billion and $\mathbf{\$22.5}$ billion in capital expenditures this year to build out fiber and 5G, all while navigating a net debt load near $\mathbf{\$119.1}$ billion. This is a company betting its future on bundling wireless and fiber to hit that projected low-to-mid $\mathbf{\$16}$ billion in 2025 operating cash flow. See the full blueprint below to understand the nine building blocks making this massive transformation happen.

AT&T Inc. (T) - Canvas Business Model: Key Partnerships

You're looking to map out the critical external relationships AT&T Inc. relies on to execute its strategy as of late 2025. These aren't just vendors; they are structural agreements shaping the network, customer acquisition, and capital structure. Here's the breakdown of the key players and the associated financial or statistical commitments.

Gigapower joint venture for open-access fiber network expansion

The joint venture with BlackRock, Gigapower, is central to AT&T Inc.'s fiber ambitions outside its traditional footprint. This partnership is designed to deploy a multi-gig fiber network using a commercial open-access platform. AT&T Inc. projects reaching over 60 million total fiber locations by 2030, a figure that incorporates the Gigapower build, acquired Lumen Mass Markets assets, and other commercial open-access agreements. For 2025, AT&T Inc. is allocating significant capital, projecting total capital investment guidance up to $22.0 to $22.5 billion for the full year. Furthermore, AT&T Inc. anticipates $6.5-$8.0 billion in cash tax savings for the period spanning 2025-2027, with a specific commitment to invest $3.5 billion of that total into expanding its fiber network, targeting four million new locations-passed per year by 2026. AT&T Inc. expects to report its consumer subscribers served through Gigapower in the Consumer Wireline business unit operational results.

Ericsson for vendor financing and primary network equipment supply

The five-year strategic agreement with Ericsson is a massive commitment to Open RAN technology. This deal is valued at approximately $14 billion and positions Ericsson to supply equipment that will carry 70% of AT&T Inc.'s wireless traffic by the end of 2026. AT&T Inc. noted that the expected spend under this contract is "below what the company expects to spend for wireless capital expenditure over the next 5 years." While there were rumors about vendor financing, AT&T Inc. stated it is actually reducing its exposure to vendor financing. The deployment scaling in 2025 involves multiple vendors, including Corning Incorporated, Dell Technologies, Fujitsu, and Intel. Ericsson will manufacture the 5G equipment for this contract at its Lewisville, Texas, factory, ensuring compliance with the Build America, Buy America infrastructure law.

NATE agreement to transition tower-contracting to a single-tier model

In December 2025, AT&T Inc. reached a landmark agreement with NATE: The Communications Infrastructure Contractors Association to reset tower contracting practices. This move is intended to stabilize margins and improve workforce conditions. The key terms commit AT&T Inc. to several structural changes:

• Transitioning from the "turf vendor" model to a single-tier subcontractor stacking scheme by June 2026.
• Adopting 30-day payment terms following project completion.
• Requiring at least 50% of tower workers on AT&T Inc. sites to hold valid NWSA certifications.
• Enforcing continued restriction on 1099/independent-contractor labor.

This framework seeks to eliminate the murky hierarchy of "super-GCs" (general contractors) and nested subcontractors, which industry reports suggested was causing financial pressure on contractors, with nearly 80% of NATE members surveyed in July 2025 stating MNO pricing did not cover operational costs.

Gigs partnership to enable US tech companies to launch mobile services

Announced in September 2025, the alliance with Gigs allows technology brands to embed AT&T Inc.-powered connectivity directly into their apps. This aims to create a lower-cost path for subscriber growth by shifting distribution to digital storefronts with near zero customer acquisition costs. The model allows for instant plan activation, in-app management, and AI-driven customer service. Klarna, the global digital bank, is the first brand to launch a mobile plan through this platform, with others like OnePay and Majority also introducing branded phone plans. This partnership signals a strategic shift in distribution channels, moving away from traditional marketing.

TPG Capital, following the sale of the remaining 70% stake in DIRECTV

AT&T Inc. finalized its complete exit from the satellite television business on July 2, 2025, by closing the transaction to sell its entire remaining 70% stake in DIRECTV to TPG Capital. This divestiture builds upon TPG's existing minority interest. When the deal was initially agreed upon in September 2024, AT&T Inc. expected to receive approximately $7.6 billion in cash payments from DIRECTV and the buyer through 2029. This move aligns with AT&T Inc.'s ongoing strategy to focus on its core telecommunications business, specifically wireless 5G and fiber connectivity services. For comparability to its 2025 targets, AT&T Inc. planned to report adjusted EPS and free cash flow excluding earnings and cash flows related to DIRECTV starting in the first quarter of 2025.

Here's a quick look at the financial context of this major divestiture:

The focus now is clearly on the core network, as evidenced by the 2025 capital investment guidance of $22.0 to $22.5 billion. Finance: draft 2026 capital allocation plan by end of Q1 next year.

AT&T Inc. (T) - Canvas Business Model: Key Activities

You're looking at the core actions AT&T Inc. is driving right now to reshape its future, moving away from legacy systems and doubling down on high-speed connectivity. This isn't just maintenance; it's a massive, capital-intensive pivot.

Aggressive expansion of 5G and fiber networks across the US

The primary activity is the relentless build-out of fiber optic infrastructure, which is consuming the lion's share of capital. For fiscal year 2025, AT&T Inc. set its total capital expenditures (CAPEX) guidance at approximately $\text{\$22 billion}$. Of that, a significant $\text{55\%}$, equating to around $\text{\$12.1 billion}$, is earmarked specifically for fiber expansion. This aggressive deployment is yielding results, with fiber broadband revenue surging $\text{19\%}$ year-over-year to $\text{\$2.1 billion}$ in Q1 2025. The company is focused on expanding its fiber footprint to meet demand, aiming for $\text{30 million}$ locations passed by mid-2025, up from $\text{28.9 million}$ passed in 2024. The long-term goal is to reach $\text{50 million}$ total fiber locations by the end of 2029.

Simultaneously, the 5G network modernization is key, with a plan to complete the overhaul by 2027. AT&T Inc. expects to cover over $\text{300 million}$ people with deep mid-band 5G spectrum by the end of 2026. The financial expectations tied to these network investments include guidance for consolidated service revenue growth in the low-single-digit range and Adjusted EBITDA growth of at least $\text{3\%}$ annually through 2027.

Here's a look at the network scale and targets:

Decommissioning of legacy copper wireline operations by 2029

AT&T Inc. is actively working to retire the vast majority of its legacy copper network by the end of 2029. This is a major operational shift, as maintaining the copper network costs the company $\text{\$6 billion annually}$. The transition is phased; Phase 1 targets areas without a planned fiber build, aiming for completion by the end of 2027, using AT&T Phone-Advanced, fixed wireless, or satellite as replacements. Only about $\text{5\%}$ of customers are still on copper voice technology, but the company plans to reduce its overall copper services footprint by $\text{50 percent}$. The initial step involves filing with the FCC to stop selling legacy products at about $\text{1,300}$ of its approximately $\text{4,600}$ wire centers.

Managing a massive debt load and executing on deleveraging targets

Debt management remains a critical activity, though progress is evident. AT&T Inc. is operating within its net leverage target of net debt-to-adjusted EBITDA in the $\text{2.5x}$ range as of Q1 2025. This target was first hit in the first half of 2025. Net debt stood at $\text{\$119.1 billion}$ in Q1 2025, down from $\text{\$137.63 billion}$ at the end of 2024. The company is funding its growth and returns through strong cash generation, guiding for Free Cash Flow (FCF) of $\text{\$16 billion+}$ for the full year 2025, expected to grow to $\text{\$18 billion+}$ by 2027. This cash flow supports the dividend and a planned $\text{\$20 billion}$ in share repurchases between 2025 and 2027.

AI-driven network optimization to achieve $3 billion in annual savings by 2027

Integrating Artificial Intelligence is a core activity driving efficiency. AT&T Inc. has a stated goal of achieving $\text{\$3 billion+}$ in run-rate cost savings by the end of 2027, which includes an interim target of $\text{\$2 billion+}$ in run-rate savings by mid-2026. The company currently runs more than $\text{600}$ machine learning and AI models in production. The return on investment for generative AI is reported at $\text{2X}$ for every dollar invested. To support this, over $\text{50,000}$ employees have completed formal AI training.

Acquiring Lumen's Mass Markets fiber business to expand footprint

A recent, major activity was agreeing to acquire substantially all of Lumen Technologies' Mass Markets fiber business for $\text{\$5.75 billion}$ in an all-cash transaction. This deal, expected to close in the first half of 2026, adds about $\text{1 million}$ fiber customers and access to over $\text{4 million}$ fiber locations across $\text{11 U.S. states}$. The acquisition cost translates to approximately $\text{\$1,450}$ per fiber location. Lumen expects to use the net proceeds of about $\text{\$4.2 billion}$ to pay down $\text{\$4.8 billion}$ in its own high-interest debt. For AT&T Inc., this acquisition helps accelerate its path to reaching $\text{60 million}$ total fiber locations by 2030.

• The acquired footprint includes metro areas like Denver, Seattle, Phoenix, and Las Vegas.
• The deal is expected to be accretive to adjusted EBITDA and free cash flow in the long term.
• AT&T Inc. reiterated its plan to repurchase at least $\text{\$3 billion}$ of common stock by year-end 2025 under its existing authorization.

AT&T Inc. (T) - Canvas Business Model: Key Resources

You're looking at the core assets AT&T Inc. (T) relies on to run its business as of late 2025. These aren't just assets; they are the foundation of their competitive moat, especially as they push convergence between wireless and fiber.

Extensive wireless spectrum holdings are a massive barrier to entry. AT&T Inc. (T) secured significant mid-band spectrum, paying $9.1 billion for the 3.45 GHz holdings alone. The deployment of this 3.45 GHz spectrum is aggressive, targeting coverage of nearly two-thirds of the U.S. population by mid-November 2025. Also, the company is planning acquisitions of spectrum licenses from EchoStar to further enhance capacity.

The physical infrastructure is immense. AT&T Inc. (T) claims the nation's largest fiber network. By the third quarter of 2025, this network was passing more than 31 million total locations with fiber broadband. Management has a longer-term goal to reach approximately 60 million total fiber locations by the end of 2030.

On the wireless front, the National 5G network reach is substantial. As of March 2025, AT&T 5G covered over 316 million people nationwide. The low-band component alone reached over 22,000 cities and towns.

The Large, high-value postpaid phone subscriber base is a key revenue driver, showing strong momentum in Q3 2025. The company added 405,000 postpaid phone net additions in the third quarter of 2025, while maintaining a postpaid phone churn rate of just 0.92% in that same period. This base is highly valuable, with over 41% of AT&T Fiber households also subscribing to AT&T Mobility services.

Financially, the company generates Substantial cash flow from operations. For the full year 2025, AT&T Inc. (T) projects free cash flow in the low-to-mid $16 billion range. For context, the cash from operating activities in the third quarter of 2025 alone was $10.2 billion.

Here is a snapshot of some of the key operational and financial metrics supporting these resources:

The convergence strategy is clearly reflected in the customer base metrics, showing how the wireless and fiber assets work together:

• 41% of AT&T Fiber households also choose AT&T Mobility services as of Q3 2025.
• Consumer fiber broadband revenue grew 16.8% year-on-year in Q3 2025.
• Mobility service revenue grew 2.3% year-over-year in Q3 2025.
• AT&T added 288,000 AT&T Fiber net additions in Q3 2025.

The company is also executing on its capital plan to support these resources, expecting full-year capital investment in the $22 billion to $22.5 billion range for 2025.

AT&T Inc. (T) - Canvas Business Model: Value Propositions

You're looking at the core promises AT&T Inc. (T) is making to the market as of late 2025. It's all about network superiority and customer lock-in through bundling. Let's break down the hard numbers behind these claims.

Fast, reliable, and secure connectivity via 5G and fiber

The foundation of AT&T Inc. (T)'s value proposition rests on its massive infrastructure buildout. They have hit a major milestone, passing 30 million fiber locations as of mid-2025, putting them halfway to their 2030 goal of 60 million fiber passings. This footprint is targeted to include approximately 25 million consumer locations and 5 million business locations by the end of 2025. The network performance is validated by industry recognition; Ookla awarded AT&T the Fastest Fixed Network for the final quarter of 2024. On the wireless side, the 5G network now reaches 290 million people across nearly 24,000 cities and towns, with mid-band 5G spectrum coverage expected to cover two-thirds of the U.S. population by mid-November 2025. This network investment shows up in the financials, with Consumer Wireline Revenue growing 5.1% year-over-year in Q2 2025.

Converged offerings: bundling wireless and fiber for lower churn and discounts

This strategy is about making it sticky for customers to use AT&T Inc. (T) for everything. The results show this is working: in Q3 2025, over 41% of AT&T Fiber households also subscribed to AT&T Mobility service. Management states these converged customers are the most valuable, exhibiting the lowest churn profile and highest lifetime values. While the company added 405,000 postpaid phone net additions in Q3 2025, the postpaid phone-only churn rate did tick up slightly to 0.92%, up 14 basis points year-over-year, suggesting aggressive pricing was needed to win volume. To drive this bundling, AT&T offers concrete discounts, such as 20% off AT&T Fiber when paired with an eligible unlimited wireless plan. Still, the pressure from promotions meant the Postpaid phone Average Revenue Per User (ARPU) fell 0.8% to $56.64 in Q3 2025.

AT&T Guarantee: a promise of reliable connectivity or a service credit

To build trust after past service issues, AT&T Inc. (T) launched the AT&T Guarantee on January 9, 2025. This isn't just a slogan; it has specific financial consequences for the company. For fiber customers, an outage lasting 20 minutes or more triggers an automatic bill credit equaling a full day of service. For wireless, the threshold is 60 minutes or more of downtime impacting 10 or more towers. Furthermore, they promise responsiveness: if your wait time for technical support exceeds five minutes and a callback isn't offered or received, you get a reward card. This commitment is backed by significant operational investment, with the company stating it invested more than $750 million in customer care operations related to this initiative.

High-speed fiber broadband with speeds up to 5 Gigabits per second

AT&T Inc. (T) is pushing the top end of consumer speed capabilities. Their fiber plans deliver symmetrical speeds up to 5,000Mbps, which is the 5 Gigabits per second tier. For the top-tier Internet 5000 plan, the single device wired speed maximum is reported at 4.7Gbps. The fastest speed seen across their network is 4,542 Mbps. The company is actively promoting these top tiers with offers; for example, the Internet 5000 plan can be had for as low as $90/mo for new residential customers after specific discounts.

Here's a look at the advertised residential fiber tiers:

Specialized, scalable solutions for nearly all Fortune 1000 companies

AT&T Inc. (T) targets the largest enterprises with its business solutions, which include Dedicated Internet Access, Ethernet, SD-WAN, and Cybersecurity services. The Fortune 1000 list itself represents a massive economic base, with those 1000 U.S. companies collectively generating $22 trillion in revenue in 2025, and a median revenue of $16.64 billion. While the company is focused on growing this segment, the Business Wireline segment revenue declined about 9% year-over-year in Q2 2025, driven by a 17.4% decline in legacy services. To counter this, AT&T is aggressively expanding its business fiber presence, aiming to pass 5 million business fiber locations by the end of 2025. A key specialized offering is FirstNet, the dedicated public safety network, which boasts approximately 6.4 million total connections.

You should watch the Business Wireline segment closely; the pivot to connectivity-based products is happening, but the legacy revenue decline is substantial. Finance: draft the Q4 2025 Business Wireline segment revenue vs. guidance comparison by next Tuesday.

AT&T Inc. (T) - Canvas Business Model: Customer Relationships

You're looking at how AT&T Inc. connects with and keeps its customers as of late 2025. The strategy is clearly about locking in high-value relationships, primarily through bundling their wireless and fiber assets. Honestly, the numbers from the third quarter of 2025 tell a compelling story about where the growth is coming from.

The success in acquiring high-quality wireless subscribers is directly tied to the push for convergence. AT&T Inc. reported 405,000 postpaid phone net adds for Q3 2025, which comfortably beat analyst estimates. This acquisition strategy is heavily promotional, leveraging discounted bundles combining 5G mobile and high-speed fiber plans to attract new, profitable customers.

The proactive retention effort via converged service bundles is a central pillar of the relationship strategy. Customers who bundle services show significantly better retention profiles and higher lifetime values, which is the whole point of the investment-led strategy. The pace of this bundling trend is accelerating:

• Convergence Rate (Fiber households also subscribing to Mobility): Reached 41.12% at the end of Q3 2025.
• This convergence rate was up 180 basis points from a year ago, representing one of the largest quarterly gains in the last three years.
• For fixed wireless, more than half of AT&T Internet Air subscribers also choose AT&T for their wireless service.

The results of this bundling drive are visible across the subscriber additions for the quarter:

For large enterprise customers, AT&T Business has been streamlining its engagement model. In mid-2025, the enterprise and mid-market organizations were unified under one executive, Melissa Arnoldi, to streamline go-to-market activity. This structure supports dedicated account management for these large, complex sales, where AT&T Communications serves nearly 3 million business customers, including almost all of the Fortune 1000.

The push for self-service digital tools is a response to broad consumer preference, aiming to simplify interactions. While AT&T Inc. specific adoption rates aren't public, the market trend shows that over 60% of US consumers prefer using digital self-service solutions for simple inquiries. Furthermore, 81% of customers want the brands they use to provide more self-service options to find answers on their own. This supports the broader strategic goal of focusing customer service on simplicity and transparency, moving away from complex telecom models.

The overall customer base context as of late 2025 shows the scale AT&T is managing:

• Total postpaid phone customers: Approximately 73 million.
• Total prepaid phone customers: Approximately 17 million.
• The company is focused on driving improved yield from existing customers through ARPU (Average Revenue Per User) increases and moving them to higher value plans.

Finance: draft 13-week cash view by Friday.

AT&T Inc. (T) - Canvas Business Model: Channels

You're looking at how AT&T Inc. gets its products and services into the hands of customers across the board, from individuals to massive corporations. It's a multi-pronged approach, blending physical presence with digital efficiency.

Company-owned retail stores and authorized dealer locations

The physical footprint remains a core channel for AT&T Inc. As of October 07, 2025, there are 5,862 AT&T locations across the United States. This network is designed for high-touch customer interactions, device sales, and service activation. To give you a sense of geographic concentration, Texas leads with 614 locations, representing about 10% of the total footprint, closely followed by California with 600 locations, also about 10%. Still, the total number of locations can vary slightly depending on the reporting date; for instance, a May 2025 report cited a total of 5,947 locations.

Direct sales force for large enterprise and business customers

For the Business Wireline segment, which saw its revenue decline in FY 2024, the direct sales force targets large organizations needing complex solutions. In fiscal year 2024, the Business Service segment generated $18.06 billion in revenue, which accounted for 14.77% of the company's total revenue that year. This segment is crucial for selling integrated solutions, even as the Business Wireline EBITDA is expected to decline in the low double-digit range for the full year 2025.

Online sales channels and mobile apps for self-service and upgrades

Digital channels are key drivers for efficiency and customer lifecycle management. The mobile apps and online portals facilitate self-service for existing customers and device upgrades. The success of the convergence strategy shows the digital channel's pull: in Q3 CY2025, 41% of AT&T Fiber households also subscribed to AT&T wireless services, indicating strong digital bundling success. Furthermore, more than half of AT&T Internet Air subscribers also have AT&T wireless, a clear indicator of successful digital cross-selling.

• AT&T Fiber households with wireless convergence: 41% (Q3 2025).
• AT&T Internet Air subscribers with wireless service: Over half (Q3 2025).

Wholesale agreements for network access and fixed wireless (AT&T Internet Air)

Wholesale arrangements support network expansion and service delivery in specific markets. AT&T Internet Air, the fixed wireless access (FWA) service, is a significant growth vector, often leveraging the same core network infrastructure. In Q2 2025, AT&T Internet Air added 203,000 net customers, pushing the total subscriber base past one million net air subscribers. The company is also strategically expanding its fiber footprint, which includes leveraging partnerships like the Gigapower joint venture with BlackRock, and has agreed to acquire substantially all of Lumen's Mass Markets fiber business.

Third-party retailers for device and service sales

AT&T Inc. sells through third-party retail stores alongside its company-owned locations and agents. This channel helps extend reach for device and service sales, though specific 2025 sales volume data through this channel isn't explicitly broken out separately from overall sales. The company's 2023 Annual Report confirmed sales occur through agents and third-party retail stores, complementing the direct channels.

AT&T Inc. (T) - Canvas Business Model: Customer Segments

You're looking at the core groups AT&T Inc. is selling connectivity to right now, based on their latest reported operational snapshot from the third quarter of 2025. It's all about who is paying for the wireless and the fiber.

Individual Consumers: High-value postpaid wireless and fiber broadband subscribers

This is the bread and butter, where the convergence strategy is showing its teeth. The focus here is on locking in customers across both mobile and fixed lines. In the third quarter of 2025, AT&T Inc. added 405,000 net postpaid phone subscribers. That brings the total postpaid phone subscriber base up to 73.8 million subscribers altogether. The churn rate, which is how many people leave, for postpaid phone-only customers settled at 0.92% for the quarter. The average revenue per user (ARPU) for postpaid phone lines was $56.64 in Q3 2025.

On the wireline side, the premium fiber product is pulling in new users consistently. AT&T Fiber added 288,000 new customers in Q3 2025, pushing the total fiber subscriber count past 10 million, specifically reaching 10.1 million total fiber subscribers. This segment is driving significant revenue growth; consumer fiber broadband revenues hit $2.2 billion, marking a 16.8% year-over-year increase. The real win here is the cross-sell: over 41% of AT&T Fiber households also subscribe to AT&T Mobility services.

Small and Midsize Businesses: Seeking scalable wireless, fiber, and fixed wireless (Internet Air)

For the business side, the story is one of transition, with legacy services shrinking while fiber connectivity grows within the segment. The overall Business Wireline revenues saw a contraction, coming in at $4.248 billion in Q3 2025, which is a 7.8% year-over-year decline. The operating income for Business Wireline fell even harder, down 12.9% to $1.18 billion. However, the newer fiber and advanced connectivity services within this segment managed a 6.0% increase. You have to remember that this segment also uses Internet Air for locations not yet served by fiber.

Large Enterprises: Requiring secure, high-capacity network and managed services

Large enterprises fall under the Business Wireline umbrella, and the data shows they are moving away from older, less scalable services. The persistent decreases in legacy and transitional services are the primary driver for the segment's revenue drop. While specific enterprise revenue is not broken out, the overall Business Wireline revenue decline of 7.8% in Q3 2025 reflects this shift away from traditional contracts toward more modern, high-capacity solutions like dedicated fiber circuits.

Wholesale Customers: Other carriers and service providers utilizing AT&T's network infrastructure

Wholesale is less about direct consumer sales and more about infrastructure access. A key metric showing network utilization by other entities, like government or first responders, is the FirstNet connection additions. AT&T Inc. added 316,000 FirstNet connections in the third quarter of 2025. This shows the continued reliance on AT&T's network for mission-critical services.

Fixed Wireless Customers: Served by AT&T Internet Air in non-fiber areas

AT&T Internet Air, the fixed wireless access (FWA) offering, is crucial for capturing customers where fiber buildout is still pending. This segment saw strong adoption in Q3 2025, adding 270,000 net new customers. This product is key because, without it, the overall residential subscriber base would have shrunk; Internet Air additions helped offset losses in legacy copper services.

Here's a quick look at the Q3 2025 broadband additions:

The total consumer broadband revenue for the quarter was up 8.2%, driven by these two high-growth products.

Finance: draft 13-week cash view by Friday.

AT&T Inc. (T) - Canvas Business Model: Cost Structure

The Cost Structure for AT&T Inc. is heavily weighted toward capital-intensive network build-out and ongoing operational maintenance, reflecting its dual focus on 5G wireless and fiber expansion.

Capital Expenditures (CapEx) represent a massive, planned outlay. AT&T Inc. projects its full-year 2025 capital investment to be in the range of $22 billion to $22.5 billion. This significant spending is directed toward accelerating the deployment of its fiber network and maintaining its 5G infrastructure.

Network operating expenses are a constant drain, though some costs are being managed. For the third quarter of 2025, total Operating Expenses were reported at $24.17 billion. You see specific cost pressures in areas like the Consumer Wireline segment, where operating expenses rose year over year due to higher depreciation expense driven by fiber investment and higher network-related costs in the first quarter of 2025. Conversely, lower network access costs, including higher vendor settlements in 2025, provided some offset in that same quarter.

The cost of acquiring and retaining high-value subscribers is escalating due to market competition. AT&T Inc. is actively addressing rising customer acquisition costs by focusing on operational efficiencies. In the Mobility unit, operating costs increased in the third quarter of 2025, driven by higher expenses from selling more pricier phones and increased spending on marketing and promotions, such as lucrative trade-in offers for new handsets. Customer retention is a key cost driver, with postpaid phone churn rising to 0.92% in the third quarter of 2025.

Strategic asset acquisition is another major cost component. The company recently secured FCC approval in December 2025 for its deal to acquire wireless spectrum licenses from U.S. Cellular for $1.02 billion. This is a direct, large-scale investment in a key resource.

Servicing the company's substantial debt load is a non-negotiable, fixed cost. As of the first quarter of 2025, AT&T Inc.'s net debt stood at approximately $119.1 billion. The associated debt servicing cost, as reflected in the Interest Expense for the first quarter of 2025, was $1,658 million (or $1.658 billion).

Here is a summary of key cost-related financial figures from recent periods:

The primary cost drivers are:

• Network Build-Out: The $22 billion to $22.5 billion annual CapEx budget for 2025.
• Financing Costs: Interest expense on the $119.1 billion net debt position.
• Customer Acquisition: Increased spending on marketing and promotions for Mobility.
• Infrastructure Investment Impact: Higher depreciation expense tied to fiber deployment.
• Spectrum Outlay: Large, discrete costs like the $1.02 billion U.S. Cellular spectrum purchase.

Finance: draft 13-week cash view by Friday.

AT&T Inc. (T) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers driving AT&T Inc.'s top line as we head into the end of 2025. The revenue story is clearly segmented; it's not one monolithic growth rate across the board. It's a story of high-growth connectivity battling legacy decline, so you need to track the components.

Mobility Service Revenue remains the bedrock, and the guidance for the full year is holding steady at expected growth of 3% or better in 2025. That momentum is what you want to see. For the third quarter of 2025, Mobility service revenue hit $16.9 billion, showing a year-over-year increase of 2.3%. Honestly, the growth rate is slightly below the Q1 pace of 4.1%, but it's still positive.

The fiber build-out is paying off in the Consumer segment. Consumer Fiber Broadband Revenue is projected to surge in the mid-to-high teens for the full year 2025. In the third quarter of 2025, this revenue stream delivered $2.2 billion, which is a year-over-year jump of 16.8%. That's the kind of growth rate you see in a market-taking asset.

On the other side of the ledger, Business Wireline Revenue continues its secular decline. In the third quarter of 2025, this segment's revenue was down 7.8% compared to the prior year period. This pressure from migrating customers off legacy voice and data services is a consistent headwind.

We can track the hardware component, too. Equipment Revenue, which is the sales of mobile devices and other hardware, came in at $5.373 billion for the third quarter of 2025. This number fluctuates based on upgrade cycles and promotional timing, so it's less predictable than service revenue.

The Fixed Wireless Access (FWA) Revenue stream, represented by AT&T Internet Air subscribers, shows clear traction. In the third quarter of 2025 alone, AT&T Internet Air added 270,000 new subscribers. This is part of a larger trend where the total number of subscribers for AT&T's advanced broadband services, including Fiber and Internet Air, reached 550,000 new subscribers in Q3 2025.

Here's a quick look at the Q3 2025 segment performance that feeds these revenue streams:

You can see the convergence strategy in the subscriber numbers, which directly impacts future service revenue. The company reported key subscriber metrics that feed these revenue buckets:

• Postpaid phone net additions: 405,000 in Q3 2025.
• AT&T Fiber net additions: 288,000 in Q3 2025.
• Postpaid phone churn: 0.92% in Q3 2025.
• Percentage of Fiber households also choosing Mobility: Over 41%.

Finance: draft 13-week cash view by Friday.