Blog: You, us, everyone

AT&T is back as an incumbent leader in the telecom market. Along with a stronger financial position and a clear plan to invest in its networks, it is expected that returns for investors are going to be far better than through its previous media strategy. Aggressively extending fiber and 5G coverage to more locations builds on its core assets—its existing network and customer relationships—and should allow AT&T to gradually expand its share of telecom spending. AT&T is the third-largest wireless carrier in the United States, but one can believe it has adequate scale, spectrum, and financial resources relative to both Verizon and T-Mobile to generate solid profitability.

Also, the industry’s structure has improved, with three major players that have little incentive to price irrationally in search of short-term market share gains. The industry sector will gradually reach competitive balance as each carrier deploys 5G technology on deep mid-band spectrum holdings and crafts pricing strategies that appeal to each market segment.

Upstart Dish Network could present challenges in some areas, but as of now it is not a credible threat to the traditional wireless business. Also, AT&T and Dish recently signed a 10-year wholesale agreement that should allow AT&T to participate in Dish's growth. Dish is expected to focus on emerging wireless applications in the enterprise market, an area where AT&T also has a strong presence.

AT&T also benefits from its ownership of deep network infrastructure across much of the U.S. and its ability to provide a range of telecom services. The plan to extend fiber to up to 4 million homes and businesses annually through at least 2025 builds on this position and should allow the company to serve those locations directly and enhance wireless coverage in the surrounding areas. AT&T expects to reach around 30 million total customer locations with fiber by 2025, covering about half its existing fixed-line footprint, making it the third-largest high-quality fixed-line network in the U.S. (behind Comcast and Charter). It is expected that AT&T will have the ability to use its combined wireless and fixed-line capabilities to grab market share in this large and growing territory over the next decade.

Opportunities:

Following a period of investment, AT&T will hold a nationwide 5G wireless network with deep spectrum behind it and a fiber network capable of reaching nearly one-fourth of the U.S.  

AT&T has the scale to remain a strong wireless competitor over the long term. With three dominant carriers, industry pricing should be more rational going forward.

Combining wireless and fixed-line networks with new technologies and deep expertise makes AT&T a force in enterprise services.