AT&T, Inc. T has been implementing several initiatives to drive customer retention over the past several quarters. Its convergence strategy has become one of the central pillars of these retention efforts. The company is focused on increasing the number of households that subscribe to both AT&T wireless and broadband services, including AT&T Fiber and AT&T Internet Air. Its convergence strategy is paying off well that is evident by recent quarterly results.
Around 42% of AT&T’s advanced home Internet users also subscribe to its wireless services. Management has stated that this is approaching 45% on an organic basis. When customers get dependent on multiple services from a single vendor, it becomes difficult for them to change service providers. From a user’s point of view, opting for fiber and wireless services from a single vendor reduces complexity for them as well. This trend improves customer retention, lowers churn and increases long-term customer value.
AT&T's postpaid phone churn improved sequentially to 0.89% in the first quarter of 2026 from 0.98% in the fourth quarter of 2025, reflecting stronger customer retention. To support these convergence trends, the company is rapidly expanding its fiber infrastructure. It has reached more than 37 million fiber locations. It is targeting more than 40 million fiber locations in 2026 and 60 million fiber locations in 2027. More fiber availability creates more opportunities to cross-sell wireless. This will likely support T's convergence strategy in the long run.
How Are Competitors Faring?
The company faces competition from Verizon Communications, Inc. VZ and Comcast Corporation CMCSA. Verizon has been aggressively bundling wireless and broadband services through its myPlan and myHome offerings. The company has also been expanding its fiber footprint through the Frontier acquisition and growing fixed wireless access (FWA) to deepen customer relationships and increase cross-selling opportunities.
Comcast has also built a convergence strategy around its dominant broadband footprint and growing wireless business, Xfinity Mobile. The company increasingly bundles broadband and mobile services and expand customer base through discount and perks. Verizon and Comcast’s strategy mirrors AT&T's retention-focused approach.
T’s Price Performance, Valuation & Estimates
AT&T stock has declined 7.8% over the past year compared with the Wireless National industry’s decline of 11.1%.
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Going by the forward price to earnings ratio, the company’s shares currently trade at 10.57 forward earnings, lower than the industry’s 11.93.
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Earnings estimates for T for 2026 have moved upward in the past 60 days while for 2027 it has remain unchanged.
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AT&T currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).