AT&T Inc. (T) shares extended gains Wednesday after the telecom giant reported second-quarter earnings that surpassed Wall Street expectations. Revenue rose 2.3% year-over-year to $31.56 billion, while earnings per share of $0.65 marked a 20.4% increase from the prior-year period.
In an interview following the release, CEO John Stankey addressed growing investor concerns about competition from satellite-based internet providers such as Starlink. “We can compete with anybody that comes in; we’re in a very strong position with the best product out there,” Stankey said on CNBC.
Structural Advantages Against Satellite Rivals
Stankey argued that new entrants face significant structural hurdles in trying to replicate ground-based connectivity. While low-Earth orbit (LEO) satellite networks attract headlines, he noted that rivals are “coming to the game very late after this industry has already been established.”
The CEO emphasized that satellite networks cannot replace the tens of billions of dollars invested over decades to bring high-speed fiber and 5G connectivity into dense environments such as hospitals, university campuses, stadiums, and high-rise office buildings. AT&T currently handles more than 98% of data traffic generated by its converged customers, with satellite coverage serving only to fill gaps when users move entirely off the terrestrial grid.
No Wholesale Agreement with Starlink
Addressing concerns that legacy carriers might repeat past mistakes by signing wholesale network agreements that empower new competitors, Stankey dismissed the notion. He stated that AT&T does not need a wholesale partnership with Starlink to defend its market position. The company pursues wholesale arrangements only when a segment of the market cannot be reached through its own brand, distribution, or fiber footprint.
In primary metropolitan and suburban U.S. markets, AT&T’s combination of fiber buildouts and 5G spectrum allows it to acquire and retain both consumer and business accounts directly, making satellite-based distribution unnecessary for core market coverage.
Industry Consortium for Off-Grid Coverage
Rather than surrendering distribution to a single satellite giant, AT&T is leveraging an industry joint venture alongside T-Mobile and Verizon to manage off-grid coverage efficiently. Stankey highlighted that the consortium allows carriers to aggregate consumer traffic volumes and contract across the entire satellite ecosystem—whether sourcing capacity from SpaceX, Amazon’s Kuiper, or AST SpaceMobile.
By maintaining flexibility across multiple satellite constellations, AT&T can handle the remaining fraction of off-network traffic at economical rates without undermining its primary connectivity offerings. This pragmatic approach reinforces AT&T’s core fiber and wireless strategy while offering seamless, affordable backup connectivity for subscribers wherever they travel.
Despite the positive earnings report, AT&T stock remains down more than 20% from its year-to-date high. Wall Street currently has a consensus Overweight rating on the stock, with a mean price target of $29, suggesting significant upside from current levels. For context, the broader market has seen mixed signals from big tech earnings, as noted in our coverage of Magnificent 7 earnings underperformance testing AI spending theses and Nasdaq futures sliding on AI spending return concerns.
This article is for informational purposes only and does not constitute financial advice.
