AT&T Charts Aggressive Path with Network Overhaul and Shareholder Returns

AT&T has closed its 2025 fiscal year with robust results, surpassing its own forecasts. The telecommunications behemoth is now targeting renewed growth through 2028, powered by a massive strategic emphasis on 5G and fiber-optic networks, coupled with a multi-billion dollar capital return program. This raises a pivotal question: could this comprehensive shift transform the company into a modern network operator ahead of schedule?

A cornerstone of AT&T's forward-looking plan is a substantial commitment to returning capital to its investors. The company has outlined a program spanning 2026 through 2028 designed to funnel over $45 billion to shareholders via dividends and stock buybacks. An initial $10 billion repurchase authorization is already in place, with plans to acquire approximately $8 billion worth of its own shares in 2026 alone.

The financial foundation for these returns appears solid. Management anticipates generating at least $18 billion in free cash flow for the current 2026 fiscal year, with a goal to increase that figure to above $21 billion by 2028. For adjusted earnings per share (EPS), AT&T is projecting a range of $2.25 to $2.35 for 2026.

Converged Services Drive Customer Growth

The company's operational performance in the fourth quarter of 2025 was significantly bolstered by its focus on bundled services, which combine mobile and high-speed internet offerings. AT&T reported its strongest broadband growth in ten years, adding 421,000 postpaid mobile phone customers and gaining 283,000 new fiber internet connections.

Should investors sell immediately? Or is it worth buying AT&T?

A key metric for executives is the convergence rate, which highlights the success of this integrated approach. Currently, 42% of households with AT&T fiber also subscribe to the company's wireless services. This trend is central to the strategy of deepening customer relationships, enhancing loyalty, and improving overall profitability through combined service packages.

Strategic Reorganization and Debt Targets

Aligning with its technological evolution, AT&T is preparing a decisive move away from legacy infrastructure. The company intends to completely decommission its outdated copper networks by 2029. Beginning in the first quarter of 2026, financial results for 5G and fiber-based services will be consolidated under a new reporting segment named "Advanced Connectivity."

Concurrently, AT&T is focused on strengthening its balance sheet. The firm aims to reduce its net debt to adjusted EBITDA ratio to around 3.0 by the end of 2026, with a longer-term target of 2.5. The market has responded favorably to these developments recently. Despite a minor pullback to €21.92 on Monday, February 2, 2026, the share price recorded a notable seven-day gain of more than 11%.

Furthermore, the dividend payment for common shares was distributed on February 2, 2026. Investors can expect the next detailed update on the operational execution of this new strategy between April 22 and 27, 2024, with the release of AT&T's first-quarter 2026 results.