AT&T lowered its long-term capital investment outlook while retaining its target to reach more than 60 million consumer and business locations with fiber by the end of 2030. The carrier now expects capital investment of $22 billion to $23 billion annually in 2027 and 2028, while keeping its 2026 range at $23 billion to $24 billion. The October 21 third-quarter results put capital discipline at the center of its fiber-and-5G expansion, alongside plans to return more than $45 billion to shareholders during 2026–2028.

Third-quarter capital expenditures from continuing operations were $5.1 billion, up from $4.9 billion a year earlier. Capital investment, AT&T’s non-GAAP measure that also includes cash paid for vendor financing, reached $5.6 billion, versus $5.3 billion. The company reached more than 39 million fiber locations and remains on track to exceed 40 million by year-end. Its total includes owned-and-operated locations and locations available through fiber ventures and other commercial open-access providers; it does not represent an entirely wholly owned footprint. AT&T added 769,000 internet connections, comprising 442,000 fiber and 327,000 fixed-wireless customers, plus 379,000 postpaid phone customers.

Revenue increased 5.3% to $32.3 billion, with consolidated service revenue rising 3.8%, its strongest growth in more than four years. Advanced Connectivity service revenue grew 6.1% to $23.9 billion, while consolidated adjusted EBITDA increased 5.4% to $12.5 billion. Adjusted EPS rose to $0.65 from $0.54, and AT&T raised its 2026 outlook to approximately $2.40. GAAP diluted EPS from continuing operations was $0.13, including a $2.6 billion non-cash impairment associated with the pending Mexico wireless sale and employee separation charges. Free cash flow was $5.0 billion, and net debt reached $149.8 billion following the EchoStar spectrum acquisition.

“Our asset base positions us well for the AI era, with a leading position in fiber – the best technology available,” said John Stankey, AT&T Chairman and CEO.

Analysis

AT&T’s outlook offers a different capital allocation model from the AI compute buildout. In his 2025 shareholder letter, Amazon CEO Andy Jassy described approximately $200 billion of planned 2026 capex and a willingness to accept near-term free-cash-flow pressure to build AI capacity. AT&T’s updated plan instead concentrates on monetizing fiber, fixed wireless and mobile connectivity while lowering its future annual investment range. That supports an interpretation of AT&T as pursuing a more conservative route to AI-related demand: supplying the connectivity layer, with no hyperscale AI compute construction program disclosed in these results. The budgets cover different businesses and accounting measures, so their absolute size is not a like-for-like test of efficiency.

The ownership and accounting structure matters as much as the spending headline. AT&T’s proposed venture with Global Infrastructure Partners and CPP Investments would combine Forged Fiber 37 and Gigapower, with AT&T owning 50%; closing is expected in the first half of 2027. Forged Fiber 37 is already classified as discontinued operations and excluded from the continuing-operations outlook. AT&T can therefore expand commercial fiber reach through infrastructure funded with partners, and a lower reported investment envelope does not by itself establish lower total construction spending across that footprint. Its approach still involves substantial commitments: the approximately $23 billion EchoStar spectrum acquisition increased debt, while copper retirement must remove costs as legacy revenue declines. AT&T expects legacy EBITDA to turn negative after 2027 until direct copper-network costs are substantially eliminated, making execution important to its free-cash-flow targets of more than $18 billion in 2026 and more than $21 billion in 2028.

Adjusted EPS, adjusted EBITDA, free cash flow, capital investment and net debt are non-GAAP measures. Capital investment includes capital expenditures and cash paid for vendor financing. Figures and outlook are on a continuing-operations basis; the 2027–2028 outlook also excludes AT&T Mexico.