AT&T Inc. T has inked an agreement with TransUnion TRU to improve customer experiences with branded calling services. Per the collaboration, AT&T wireless subscribers will be able to see the identity of the caller and the reason behind the call on most Android devices with TransUnion’s Branded Call Display service. The calls are verified with end-to-end industry-standard STIR/SHAKEN call authentication to help ensure their legitimacy without any separate app.

With a wide range of options, including: “Appointment Reminder,” “Customer Inquiry,” “Customer Service,” “Refill Reminder,” “Delivery Service,” “Patient Callback” and “Upcoming Visit” among others, the mobile calls display the specific reason behind the call along with the brand name and logo of businesses. This innovative offering is aimed at improving customer experiences and reinforces AT&T’s focus on the customer-centric business model.

T Buoyed by 5G, Fiber Focus

AT&T continues to enhance its network infrastructure, including 5G and fiber networks, to provide the best-in-class coverage and capacity across the nation. The infrastructure investments position it for growth by ensuring widespread access to its services. AT&T's commitment to closing the digital divide underscores its dedication to fostering inclusive connectivity and driving socio-economic progress as the digital landscape evolves. 

The company is likely to benefit from the increased deployment of mid-band spectrum and greater fiber densification. An integrated fiber expansion strategy is expected to improve broadband connectivity for enterprise and consumer markets, while steady 5G deployments are likely to boost end-user experience. By 2027, AT&T expects to complete the modernization of its 5G wireless network with open radio access network (Open RAN) technology, with mid-band 5G spectrum covering more than 300 million people by the end of 2026. 

By the end of 2029, it expects to reach more than 50 million locations with fiber, including about 45 million through organic fiber deployments and more than 5 million through Gigapower. This will coincide with its proposed plan to exit legacy copper network operations across most of its wireline footprint.

Margin Woes Mar T’s Growth Potential

Despite healthy wireless traction, AT&T is facing a steady decline in legacy services. The company’s wireline division is struggling with persistent losses in access lines because of competitive pressure from voice-over-Internet protocol service providers and aggressive triple-play (voice, data, video) offerings by the cable companies. High-speed Internet revenues are contracting due to the legacy Digital Subscriber Line decline, simplified pricing and bundle discounts. 

Revenues from Business Wireline were down in fourth-quarter 2024 due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. Total segment operating income declined 6.3% to $6.19 billion, with operating margins of 19.9% (down 160 bps). As AT&T tries to woo customers with healthy discounts, freebies and cash credits, margin pressures tend to escalate, affecting its growth potential.

Image Source: Zacks Investment Research

Estimate Revision Trend

Earnings estimates for AT&T for 2025 have moved down 7.3% to $2.15 over the past year, while the same for 2026 has declined 8.5% to $2.27. The negative estimate revision depicts bearish sentiments for the stock.

Image Source: Zacks Investment Research

Price Performance

T has gained 50% over the past year compared with the industry’s rally of 34.3%. It has outperformed peers like Verizon Communications Inc. VZ but lagged T-Mobile US, Inc. TMUS.

One-Year T Stock Price Performance

Image Source: Zacks Investment Research

End Note

By investing steadily in infrastructure and pioneering new technologies, AT&T is well-positioned to bridge the digital divide and enhance the connectivity landscape nationwide. This is likely to translate into solid postpaid subscriber growth and higher average revenue per user in the Mobility Service business. Backed by an ambitious growth plan supported by a customer-centric focus, the company expects to gain a competitive advantage within the connectivity industry by the end of the decade.

However, a saturated wireless market and price wars owing to competitive pressure have eroded its profitability. The downtrend in estimate revisions further portrays skepticism about the stock’s growth potential. With a Zacks Rank #3 (Hold), AT&T appears to be treading in the middle of the road, and investors could be better off if they trade with caution. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

AT&T Inc. (T) : Free Stock Analysis Report

Verizon Communications Inc. (VZ) : Free Stock Analysis Report

T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report

TransUnion (TRU) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research