AT&T closes billion-dollar acquisition to win back customers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In recent months, AT&T has quietly struggled with a growing customer problem amid heightened competition in the wireless industry. In response, it just made a billion-dollar move to give it a leg up on its rivals.

During the fourth quarter of 2025, AT&T saw its postpaid phone churn, the rate of customers who canceled their phone service, hit 0.98%, according to its most recent earnings report. This is 13 basis points higher than the churn it reported for the same time period in 2024.

In addition, AT&T saw 255,000 prepaid phone customers cut ties with the company during the quarter, resulting in churn in the segment reaching 2.89%, an increase of 16 basis points year over year.

During an earnings call on Jan. 28, AT&T CEO John Stankey acknowledged that there has been a spike in “switching activity” in the wireless market.

“Are there macro factors that are slowing incremental new entrants into the traditional postpaid voice? Certainly, there is some aspect to that,” he said.

While AT&T is facing tough competition from top rivals such as Verizon and T-Mobile, which have been ramping up the number of deals and discounts they offer customers, recent billing changes may also have pushed customers to flee.

For example, in April last year, AT&T reduced its autopay discount from $10 to $5 for customers who pay their bills with a debit card and completely removed it for those who pay with a credit card.

In addition, AT&T came under fire last year for allegedly hitting customers with higher-than-expected monthly bills after luring them from rival phone carriers with steep discounts.

AT&T’s recent billing changes have not gone over well with customers.

Shutterstock

AT&T completes a bold deal: what it means for customers

Amid rising customer losses, AT&T is betting big on bundling its phone and internet services to attract back customers, and it just acquired assets from a growing rival to ramp up these efforts.

AT&T has officially completed its $5.75 billion acquisition of Lumen’s Mass Markets fiber business, according to a recent press release. Now, AT&T’s fiber internet service is available across 32 states.

“This investment will create good-paying jobs, boost U.S. connectivity and bring the benefits of high-speed connections to more communities across the country,” said Stankey in the press release.

Through the acquisition, AT&T automatically added 1 million fiber subscribers across more than 4 million fiber locations to its portfolio. The phone carrier expects to reach over 60 million total fiber locations by the end of 2030.

The move from AT&T comes after Stankey said during the company’s earnings call last week that the acquisition of Lumen’s fiber assets will allow the phone carrier to offer its fiber internet service to customers at more competitive prices.

“When we complete our work at the fiber location, we believe we’re able to offer that customer access to the internet on a lower marginal cost structure than any competitor with industry-leading product performance,” said Stankey.

“We see this as a structural advantage that provides us with the flexibility to price and position our fiber services to reach customers in underserved categories and geographies and ultimately achieve higher penetration,” he added. “This includes value-conscious consumers, who are currently being served by networks with lower capacity and higher marginal costs.”

He also emphasized that the company’s rapid fiber internet expansion will benefit its wireless business by enabling it to sell more converged offers to customers.

“Beyond 2026, we plan to expand our fiber reach by approximately 5 million locations annually through the end of this decade,” said Stankey. “We expect this to drive rapid expansion of our opportunity to sell fiber and 5G together, to both households and businesses at unmatched scale.”

AT&T’s reliance on offering bundled phone and internet services to its customers follows a growing trend where more Americans across the country are opting for these bundled deals to save money, according to a survey from Optimum last year.

How many Americans prefer bundled phone and internet plans:

Approximately 70% of Americans would consider a mobile bundle, while 62% would consider an internet bundle.
Also, 80% believe that bundling internet and mobile services is more affordable than separating the services.
Roughly one-quarter of Americans would likely subscribe to a bundle in 2026. Source: Optimum

“The growing reliance on digital technology in everyday life, from social media engagement to online learning and remote work, fuels the demand for comprehensive connectivity solutions,” said Gabriel Torres, vice president of mobile product management at Optimum, in a statement to CableTV.com.

“Additionally, the desire for cost-effective options that simplify billing and provide added value is a significant motivator for consumers when choosing bundled services,” he added.

AT&T’s latest acquisition is expected to boost profits

AT&T has high hopes that the acquisition of Lumen’s fiber assets will boost its financial profile. The phone carrier expects $900 million of annualized fiber revenues.

It also expects total wireless service revenue growth of 2% to 3% annually over the next three years.

More Telecom News:

In a research note obtained by TheStreet, Morgan Stanley equity analyst Benjamin Swinburne and his team said AT&T’s fiber expansion will help the phone carrier’s stock outperform its competitors. With this outlook, Morgan Stanley kept its overweight (OW) rating and raised its price target (PT) for AT&T’s stock.

“AT&T’s strategy of rapidly deploying fiber across much of the US and leveraging that expansion to drive consolidated connectivity earnings appears well on track, despite fears of increased competition across wireless and broadband,” the analysts wrote. “We raise estimates and remain OW with a $30 PT.”