AT&T has unveiled a comprehensive and forward-looking three-year strategic plan, marked by ambitious goals in expanding its 5G midband and fiber networks, a shift toward Open RAN, and a continued phasing out of legacy infrastructure. This future-focused vision encompasses a range of targets designed to position AT&T for sustained growth, centered around the owner’s economics of an integrated network architecture and enhanced service offerings. By aiming to strengthen its technological infrastructure, AT&T is not only setting itself up for future success but is also intending to deliver unparalleled service to its customer base.
The telecommunications giant’s plan comes at a critical time as the demand for high-speed internet and advanced networking capabilities continues to surge. The shift to remote work, distance learning, and telehealth during the pandemic has highlighted the necessity for robust and reliable connectivity. AT&T regards this period as an opportune moment to invest in infrastructure upgrades that will support the growing data consumption and evolving digital landscape. Central to this strategy is ensuring that both urban and rural areas benefit from enhanced network capabilities, thereby bridging the digital divide and fostering widespread connectivity.
Expanding 5G Midband and Fiber Networks
The main objective of AT&T’s plan is extensive 5G midband and fiber network augmentation. By the close of 2026, AT&T aims to extend its midband 5G coverage from its current 270 million Points of Presence (POPs) to over 300 million. Concurrently, the company intends to expand its fiber optic network from serving approximately 29 million locations at present to catering to 50 million locations. Such measures reflect the company’s commitment to significantly enhance its infrastructure footprint and service capabilities. This ambitious expansion is set to bring high-speed connectivity to more homes and businesses, facilitating smoother communications and supporting the ever-growing need for bandwidth-intensive applications.
AT&T’s CEO, John Stankey, highlighted the success and growth seen in the 5G sector since mid-2020, particularly in boosting the subscriber base for postpaid phone services and heightening mobile service revenues. Stankey asserts that these trends are likely to continue, with expectations of mobility service revenues growing by 2-3% annually over the coming years. This projected growth is based on the increasing reliance on mobile connectivity for both personal and professional activities. As more devices become connected and data usage soars, AT&T’s network expansion will be pivotal in meeting these demands, ensuring seamless performance and fostering innovation in wireless technology.
Fiber Optics Investment and Growth
AT&T’s investments in fiber optics have shown solid returns. The company has grown its fiber-linked locations by around 11 million since mid-2020 and concurrently doubled its fiber customer base to approximately 9 million customers. AT&T projects that consumer broadband revenues will experience annual growth in the mid-teen percentages in the subsequent years, affirming the profitability and strategic importance of these investments. This steady financial return underscores the value of fiber optics in providing high-speed, reliable internet access to a growing base of consumers who demand top-tier service for streaming, gaming, telecommuting, and other online activities.
Jennifer Robertson, overseeing AT&T’s mass market business, shared insights into the current penetration rates of the fiber network, noting that in some markets, AT&T has achieved 50% customer penetration. She emphasized that the company’s goal is to double the fiber customer base relative to its expanding fiber network, thereby significantly increasing its market share and customer engagement. Robertson’s insights highlight the importance of customer satisfaction and the role of high-quality internet service in achieving it. By prioritizing fiber optic deployment, AT&T aims to deliver an exceptional online experience, fostering greater loyalty and driving further adoption of its broadband services.
Transition to Open RAN
The carrier is also venturing into an advanced phase of network modernization via multi-vendor Open RAN (O-RAN) solutions. Having initially announced the move to O-RAN a year ago with Ericsson’s technology facilitating the transition, AT&T anticipates largely modernizing its 5G network by 2027. A milestone in this journey is projected for late 2026, with 70% of its 5G network traffic expected to run on open hardware. This transition to O-RAN represents a strategic effort to standardize and democratize the telecommunications infrastructure, allowing for greater flexibility and innovation. By adopting an open architecture, AT&T aims to foster a competitive ecosystem that accelerates technology evolution and enhances service offerings.
Despite Ericsson’s pivotal role, AT&T has broadened its partnerships, signing new agreements with Fujitsu and Mavenir. These collaborations aim to enhance network performance and coverage, especially in densely populated urban areas, through the development of Open RAN C-Band radios and dual-band radios designed for utility and light pole attachment. The company remains open to integrating additional third-party radios when necessary, reflecting a flexible and opportunistic approach to its network evolution. This inclusive strategy allows AT&T to leverage different technological advancements and vendor capabilities to optimize its network infrastructure and maximize performance and reliability.
Financial Strategy and Shareholder Value
Financially, AT&T is prepared to sustain this expansive strategy with annual capital expenditures estimated at around $22 billion. Stankey points out that prudent financial management, particularly the reduction of debt in recent years, places AT&T in a favorable position to return $40 billion in value to shareholders through dividends and share buybacks. Moreover, the company anticipated having approximately $10 billion in financial flexibility for additional debt reduction, buybacks, or strategic acquisitions and investments. This fiscal prudence ensures that AT&T can pursue its ambitious growth plans without compromising its financial stability, thereby maintaining investor confidence and loyalty.
Stankey’s emphasis on financial management highlights the dual focus of the strategic plan: growth and sustainability. By balancing expenditures with returns and maintaining a robust financial position, AT&T aims to achieve long-term success and deliver continued value to its shareholders. This balanced approach enables the telecom giant to navigate market fluctuations and seize opportunities for strategic investments that drive innovation and competitiveness. The commitment to shareholder returns underscores the broader goal of creating value for all stakeholders, from investors to customers who benefit from improved service quality and reliability.
Phasing Out Legacy Infrastructure
AT&T has introduced an ambitious three-year strategic plan, aiming to expand its 5G midband and fiber networks, shift to Open RAN, and gradually phase out legacy infrastructure. This forward-thinking vision includes a set of goals intended to ensure AT&T’s sustained growth, built on the owner’s economics of an integrated network and enhanced service offerings. By strengthening its technological backbone, AT&T plans to set the stage for future success while delivering outstanding service to customers.
The plan is unveiled at a crucial moment, with rising demands for high-speed internet and advanced networking capabilities. The shift to remote work, online education, and telehealth during the pandemic has underscored the necessity for reliable, high-speed connectivity. AT&T sees this as the ideal time to invest in upgrading its infrastructure to support increasing data consumption and a rapidly evolving digital landscape. A core element of this strategy is ensuring both urban and rural areas gain from enhanced network capabilities, aiming to bridge the digital divide and promote widespread connectivity.
