AT&T is sharpening its focus on a “convergence” strategy, leveraging aggressive fiber expansion to drive wireless growth, according to comments at the Barclays Communications and Content Symposium on February 24, 2026.
The US-based telecom giant outlined higher capital spending, fresh cost-cutting targets, and a long-term fiber buildout plan designed to boost free cash flow, subscriber quality, and long-term shareholder returns.
Capex to Reach $23 Billion to $24 Billion in 2026
AT&T plans to increase capital expenditures to between $23 billion and $24 billion in 2026, up from levels seen between 2022 and 2024. The higher spending will fund fiber expansion and tighter integration between its fiber and 5G networks.
Despite the Capex ramp, AT&T management expects free cash flow to grow in 2026, supported by EBITDA expansion and lower pension contributions. The company noted that first-quarter free cash flow typically faces seasonal headwinds due to holiday device payments and incentive compensation.
AT&T announced a new target of $4 billion in incremental cost savings over the 2026 to 2028 period, building on more than $1 billion in savings achieved in 2025.
Fiber Expansion at the Core of Convergence
The company’s growth strategy centers on selling fiber and wireless services together. AT&T said converged customers – those subscribing to both services – deliver higher lifetime value, lower churn, and greater adoption of premium service tiers.
AT&T ended 2025 with 32 million fiber locations passed and currently exceeds 36 million locations following its acquisition of assets from Lumen Technologies.
The company is targeting 40 million fiber locations passed by the end of 2026. From 2027 onward, AT&T expects to build approximately 5 million new fiber locations annually – 4 million organically within its footprint and 1 million through the Lumen expansion engine.
In parallel, AT&T plans to exit 30 percent of its copper wireline footprint by the end of 2026. The decommissioning effort is expected to unlock monetization opportunities tied to real estate and copper assets.
Lumen Assets Offer Upside Potential
The February 2026 closing of the Lumen acquisition added 4 million fiber locations, which are currently only 25 percent penetrated and have less than 20 percent convergence. By comparison, AT&T’s native footprint has a convergence rate of about 40 percent.
AT&T described the Lumen footprint as a significant upsell opportunity, particularly as AT&T rolls out integrated fiber and wireless bundles.
AT&T also highlighted a competitive edge, stating it ranks number one in “brand love” in markets where it offers both fiber and wireless, enabling it to capture share from cable competitors.
Broadband revenue grew in the mid-teens during 2025, reflecting strong demand for high-speed fiber connectivity.
Wireless Growth and ARPU Management
In 2025, wireless service revenue grew more than 3 percent, supported by modest ARPU expansion. AT&T said it is managing ARPU growth by broadening its offerings to include value-conscious consumers while emphasizing convergence-driven premium plans.
While churn is expected to tick higher in 2026 due to contract cycle dynamics and shifting immigration trends, converged customers continue to demonstrate stronger retention.
AT&T remains in a quiet period related to Federal Communications Commission Spectrum Auction 113, but management reaffirmed that 5G remains a foundational element of its converged product portfolio.
Asset Partnerships and Deleveraging Focus
AT&T is also working to bring in an equity partner for the Lumen fiber assets, with a target to close the transaction in the second half of 2026 pending regulatory approvals.
Although strategic acquisitions remain part of its growth plan, AT&T reiterated its commitment to long-term deleveraging.
With higher capital investment, disciplined cost control, and an expanding fiber footprint, AT&T is positioning convergence – the combination of fiber broadband and wireless – as the central engine of growth heading into 2026 and beyond.
SHAFANA FAZAL
