AT&T CEO John Stankey views President Donald Trump’s recently passed budget as a financial windfall for the telecommunications space and teased an appetite for more fiber to feed growing market opportunities around its wired and wireless broadband services.

Stankey, during AT&T’s second-quarter earnings call, said the carrier expects to see up to $8 billion in tax savings over the next three years, with up to $2 billion of that in 2025, and up $3 billion in each of the next two years. The executive noted that these tax savings, combined with other “pro-investment” policy moves, have set the telecom industry up for significant financial growth.

“I've not seen the situation where those tailwinds were all aligned as strongly as they are anytime in my career as they are right now. And I’m surprised I don’t see more commentary on that,” Stankey said. “I would even say the alignment of those policy things that are going on right now in the direction that's occurring, the lack of friction in getting some changes done is even more significant than when the Telecom Act of [1996] was passed.”

Stankey explained that the carrier would be putting some of that expected tax windfall back into its network to the tune of $3.5 billion to accelerate its fiber Internet build. That build is a significant driver for AT&T’s ongoing operations.

The carrier reported 353,000 net broadband customer additions during its second fiscal quarter, a number that overall was impacted by a loss of 93,000 “non-fiber” connections. These losses were from AT&T’s legacy copper-based services, which dinged the combined 446,000 net connection additions that came through AT&T’s fiber-based and 5G-based Internet Air fixed-wireless access (FWA) services.

Those broadband growth segments both outperformed what they attracted during the same quarter last year and highlight AT&T’s broadband focus moving forward.

AT&T CFO Pascal Desroches, during the latest earnings call, reiterated the carrier’s long-standing posture that “our broadband strategy is and will remain fiber first.”

“However, we are increasingly able to offer Internet Air today in areas where we intend to offer fiber in the future,” Desroches said. “This positions us to leverage Internet Air to create a funnel of broadband customers that we can migrate to fiber over time as we expand fiber to serve areas where these customers live. Based on the expanded availability and strong demand, we expect a higher level of Internet Air net adds in the second half of the year as compared to the first half.”

Stankey has repeatedly targeted the Internet Air product as a fill-in or stepping stone toward AT&T’s fiber footprint. However, the Internet Air has seen a strong uptick in growth since it was slowly rolled out beginning in mid-2023, surpassing one million connections during the most recent quarter.

“We win at the top with fiber because it's a better product, and we take share and we can play at the bottom with a price-sensitive offer,” Stankey said of AT&T’s dual-approach to broadband.

Is AT&T looking at a higher fiber diet?

Stankey also explained that the carrier could look to expand its fiber holdings if the right deal came along. This includes smaller fiber firms that are struggling under increased competition.

“If you're kind of an island-based over-builder or you're an open access provider that has a small footprint, it's not [a] hospitable environment necessarily to be in,” Stankey said. “But scale costs are important, and distribution is important, and I expect in some cases, some of these over-builders are not entirely well capitalized. You can see their business plans are a bit stressed."

He added: "I'm not going to go out and overpay to buy stuff that somebody wants to sell at an asset premium, and they haven't figured out how to operate unboxing value in the business. But to the extent there's an opportunity that fits in with our existing footprint, where we can continue to enjoy our economies of scale or our footprint and our operations footprint, when we don't get fragmented, don't get spread too thin, that's how I think about playing patiently over the long haul, to take what I've already secured, which is a preferred footprint of the United States, and maybe add a little bit to it over time.”

AT&T recently moved on long-rumored plans to acquire Lumen Technologies’ consumer fiber assets for $5.75 billion. That deal includes all of Lumen’s Mass Markets fiber business and a network spanning more than 4 million locations across 11 states and serving approximately one million customers.

The Lumen network will expand AT&T’s fiber reach into new metro areas, including Denver, Colorado; Las Vegas, Nevada; Minneapolis-St. Paul; Orlando, Florida; Phoenix, Arizona; Portland, Oregon; Salt Lake City, Utah; and Seattle, Washington. It also bolsters AT&T’s fiber plans from what were originally set to pass 50 million locations by 2029, to now reaching 60 million locations by the end of 2030.

The Lumen deal continues AT&T’s own organic fiber expansion and fiber partnerships like its Gigapower joint venture with venture capital firm BlackRock. Those moves are keeping AT&T ahead of telecom rivals Verizon and T-Mobile US, both of which are also pressing further into the fiber space.

And more spectrum as well?

Stankey also noted that AT&T will continue to look at spectrum acquisition opportunities, but again in a strategic manner.

“If something pops up, we have the opportunity within our capital structure today to go and take advantage of that while at the same time honoring the commitments we've made to our shareholders and ensuring from the plans that we're in place on it, not moving off of those or changing it,” Stankey said. “And that's why we engineered at the level we engineered at, and I think that's what you should take forward.”

That spectrum opportunity could come from beleaguered telecom operator EchoStar, which is in the middle of a financial and regulatory battle for its survival. The company, which does offer a facilities-based wireless service through its Boost Mobile brand, is sitting on a treasure trove of spectrum licenses that it has spent approximately $35 billion over the past several years to accumulate.

Stankey’s engineering point fed off what the executive noted during AT&T’s Q1 earnings call when he stated the carrier’s conversion of legacy Nokia equipment with Ericsson equipment has produced better network performance characteristics than initially expected.

“That conversion as we go into those geographies opens up territory where we, because we had not done the modernization to the level we like with all of our spectrum assets and the most modern equipment, they typically were not open for fixed-wireless access, and that has opened up some footprint that will continue to open up as we go through that over the course of the next couple of years,” Stankey said during that investor call. “And I would also tell you, on the margin, we're seeing better performance off of that investment than what we would have anticipated.”

Stankey said that the operator expected to gain some network performance advantage as it was gaining benefits from a single-vendor platform and the ability to integrate more of its diverse spectrum holdings, “and those are helping.”

“We've also been doing the network as a living, breathing thing,” Stankey added. “We've gotten better at yield and traffic management in some ways that we can use some of those efficiencies back against the network in places that maybe we hadn't anticipated two years ago that have opened up some opportunity.”