Overview

AT&T Inc. is a holding company that provides telecommunications and technology services through its subsidiaries and affiliates worldwide. The company has two main reportable segments: Communications and Latin America. The Communications segment, which accounts for around 97% of total operating revenues, provides wireless, business wireline, and consumer wireline services in the United States. The Latin America segment provides wireless services in Mexico.

Financial Performance

In 2024, AT&T’s total operating revenues were $122,336 million, a slight decrease of 0.1% from 2023. This was driven by declines in the Business Wireline and Mobility equipment businesses, partially offset by growth in Mobility service, Consumer Wireline, and Latin America revenues.

Operating income decreased 18.8% to $19,049 million in 2024, primarily due to a $4,422 million non-cash goodwill impairment charge related to the Business Wireline reporting unit. This impairment was driven by a faster-than-expected industry-wide decline in legacy services. Excluding this impairment, operating income would have decreased 2.5% year-over-year.

The Communications segment’s operating income decreased 2.5% to $27,095 million, with the Mobility and Consumer Wireline businesses seeing increases offset by a decline in Business Wireline. The Latin America segment returned to profitability, reporting operating income of $40 million in 2024 compared to a loss of $141 million in 2023.

Net income from continuing operations decreased 21.6% to $12,253 million in 2024, reflecting the lower operating income and higher income tax expense.

Segment Performance

Mobility Mobility revenues increased 1.5% in 2024, driven by 3.5% growth in service revenues, partially offset by a 4.4% decline in equipment revenues. Mobility operating income increased 1.8% to $26,314 million, with the segment’s operating margin improving to 30.9%.

Mobility added 4.2 million net new subscribers in 2024, including 1.7 million postpaid phone net adds. Postpaid churn improved to 0.92%, down from 0.98% in 2023.

Business Wireline Business Wireline revenues decreased 9.9% in 2024, reflecting lower demand for legacy voice, data, and network services, as well as the impact of simplifying the product portfolio and the contribution of the cybersecurity business to a joint venture. Business Wireline reported an operating loss of $88 million, compared to operating income of $1,289 million in 2023.

Consumer Wireline Consumer Wireline revenues increased 3.1% in 2024, driven by growth in broadband, partially offset by declines in legacy voice and data services. Operating income for the segment increased 33.5% to $869 million.

The segment added 189,000 total broadband connections, including 1.0 million fiber broadband net adds, partially offset by losses in legacy DSL. Fiber broadband connections now make up 66.5% of the total broadband base.

Latin America Latin America revenues increased 7.6% in 2024, reflecting subscriber growth and higher ARPU in Mexico, partially offset by unfavorable foreign exchange impacts. The segment reported operating income of $40 million, compared to a loss of $141 million in 2023.

Mexico wireless subscribers increased 5.6% to 23.6 million, with postpaid net adds of 601,000 and prepaid net adds of 823,000.

Strengths and Weaknesses

A key strength of AT&T is its leading position in the U.S. wireless market, with a focus on growing its postpaid subscriber base and improving profitability. The company has been successful in driving service revenue growth and reducing churn through network enhancements and pricing actions.

However, the company faces challenges in its Business Wireline segment, which has been impacted by the secular decline in legacy services. The $4.4 billion goodwill impairment charge in this unit reflects the need for AT&T to further transform and simplify its business offerings to adapt to changing customer demands.

Another strength is AT&T’s growing fiber broadband business, which has seen strong subscriber additions and increasing penetration of the company’s consumer base. Fiber provides a platform for future growth and service bundling opportunities.

Geographically, the company’s Latin America segment, particularly in Mexico, has shown improvement, though it still accounts for a small portion of overall revenues and profits.

Outlook and Future Trends

Looking ahead to 2025, AT&T expects to see continued revenue growth in its wireless and broadband businesses, driven by 5G network enhancements, fiber expansion, and demand for higher-speed connectivity services.

The company plans to focus on cost transformation initiatives to improve efficiency and offset pressures from investments in growth areas like fiber and 5G. Depreciation and amortization expenses are expected to remain elevated as the company continues to upgrade and modernize its networks.

Regulatory developments will be an important factor, with potential impacts from evolving net neutrality rules, state-level broadband regulations, and the availability of additional wireless spectrum. AT&T will need to navigate these regulatory changes while continuing to invest in its infrastructure.

Overall, AT&T’s strategy appears centered on leveraging its wireless and fiber assets to drive growth, while streamlining its legacy wireline business. Success will depend on the company’s ability to execute on its transformation initiatives and adapt to changing customer preferences and the competitive landscape.

Conclusion

AT&T faced some challenges in 2024, including a significant goodwill impairment charge and continued declines in its Business Wireline segment. However, the company’s core wireless and fiber broadband businesses showed resilience, with subscriber and revenue growth.

Looking ahead, AT&T’s focus on 5G network enhancements, fiber expansion, and cost transformation initiatives position the company for potential future success. Navigating the evolving regulatory environment and adapting to industry trends will be critical as AT&T seeks to maintain its leadership position and drive shareholder value.