By Harshita Mary Varghese
(Reuters) -AT&T beat quarterly profit estimates and added more wireless subscribers than expected as customers flocked to its discounted bundles combining 5G mobile and high-speed fiber plans.
The company said on Wednesday it would invest about $3.5 billion from savings unlocked by President Donald Trump’s new tax law to accelerate its fiber network build-out, a critical growth area as the wireless market saturates and internet usage surges.
The U.S. telecom giant expects to save $6.5 billion to $8 billion in taxes through 2027 under the new reforms, and projected free cash flow to be about $1 billion higher than previously forecast for both 2026 and 2027.
New Street Research analyst Jonathan Chaplin said some investors will be disappointed that the additional free cash flow will be put towards strategic investments than share repurchases.
Shares of the company were down nearly 1% in volatile early trading.
Texas-based AT&T added 243,000 fiber customers in the second quarter, fewer than 250,610 expected by analysts at Visible Alpha.
The company said it expected the acquisition of Lumen’s mass markets fiber business, set to close in the first half of 2026, to propel it to more than 60 million fiber locations by the end of 2030.
Analysts have said savings from the tax law, which boosted annual forecast at rival Verizon, could help wireless carriers better challenge broadband giant Comcast, which has also been making inroads into wireless.
AT&T added 401,000 net monthly bill-paying wireless phone subscribers in the second quarter, it said on Wednesday, flying past FactSet estimates of 295,700. Verizon lost 9,000 customers during the same period.
The company reported revenue of $30.8 billion, beating estimates of $30.50 billion, according to data compiled by LSEG. Adjusted earnings per share of 54 cents also surpassed expectations of 51 cents.
Mobility revenue rose 6.7%, driven by subscriber gains and higher wireless device sales volumes.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Sriraj Kalluvila)
