\t\t\t169<\/i><\/p>\n
AT&T is stripping out its legacy copper network and making fiber and wireless the core of its business \u2013 with a converged service, enterprise push, and adjacent satellite integration all on the cards.\u00a0<\/em><\/p>\n In sum \u2013 what to know:<\/p>\n Foundation<\/strong> \u2013 Fiber and wireless are the foundation, with AT&T targeting more than 60m fiber locations by 2030 while retiring copper and eliminating around $6bn in legacy costs.<\/p>\n Convergence<\/strong> \u2013 AT&T chief Stankey says the next phase, after bundling, is to manage all network technologies as a seamless connectivity proposition for consumers and enterprises.<\/p>\n DCI and D2D<\/strong> \u2013 AT&T is returning to data-center interconnect, but Stankey says it will supports its network and not be its mainstay \u2013 and insists D2D is a niche, albeit valuable, concern.<\/p>\n AT&T wants to emerge from this decade as a \u201cmetropolitan fiber provider with a kick-ass nationwide wireless network\u201d \u2013 and little else, it seems. That was the message from John Stankey, president and chief executive at the firm, during a sit-down interview with Goldman Sachs Group this week (September 9). Well, almost; it is the carrier profile AT&T wants so far as its traditional customers go. Alongside, it is also developing a line in data center interconnect (DCI) to connect big AI engines in the cloud, and into metro centers at the edge. But Stankey said AT&T does not want DCI to be the \u201cmainstay\u201d; its modus operandi<\/em> is to get traffic to customers, with interconnect fiber for support.<\/p>\n AT&T is spending heavily on fiber and wireless infrastructure, illustrated by its recent deals for Lumen\u2019s consumer fiber assets<\/a> and EchoStar\u2019s wireless spectrum<\/a>, while also dismantling its legacy copper network, accumulated over many decades. Unglamorous, and not so well covered, but the project will strip $6 billion of legacy costs, it reckons \u2013 as initially tabled at its \u2018analyst day\u2019 in early 2025, and as realised in the closure of central offices, leases, \u201cchillers\u201d. \u201c[We will] leave this decade\u2026 [as] a metropolitan fiber provider with a kick-ass national wireless network, and that\u2019s all [we\u2019re] going to support. All the other stuff we\u2019ve been hauling around for decades [won\u2019t be] there anymore.\u201d<\/p>\n Stankey went on: \u201cThe agility that comes into the business, the clarity of purpose, the ability to use that unified infrastructure\u2026 to bring products out that support those two fabrics \u2013 dense, rich fiber, with a fantastic wireless network on top of it: it is going to be a great company as a result of that.\u201d Its installed copper base makes it the \u201cfifth largest copper mine in the US right now,\u201d he suggested. \u201cSeriously. That copper needs to come out and it needs to be monetized \u2013 to pay for the work to shut down all that infrastructure, rip out the mainframes, and do all the things we need to do to leave this decade as a fantastic metropolitan fiber company with a kick-ass wireless network.\u201d<\/p>\n The message was repeated again. \u201cThat\u2019s a different AT&T\u2026. And it\u2019s a different growth profile and a different agility. And that\u2019s why it\u2019s exciting.\u201d But, per the wider telco discussion, AT&T\u2019s transformation is not just about replacing copper with fiber, but about building a common hardware foundation and software fabric for consumers and enterprises, and AI players as well. Its priority is convergence, he said \u2013 not just as bundled service offers, already paying out, but as multi-access comms as well. The latter point addresses the Musk-sized angst in the market about satellite comms, of course. But all the bundling, on the back of its twin terrestrial plays, should be noted, said Stankey.\u00a0<\/p>\n Fiber locations<\/strong><\/p>\n AT&T has gone from a low-20 million range for fiber locations in 2021, to 30 million today, including about four million additional locations via the Lumen deal; it has a target of 40 million by the end of 2026, and 60 million by the end of the decade, incorporating organic builds, acquired locations, and its open-access Gigapower venture with investment firm BlackRock. \u201cFor five years, we\u2019ve been pretty deliberately investing, top of the industry\u2026 If we put the right assets in play, we can grow at a better rate, with better profitability\u2026 The goal is to [be] a scale provider in fiber, and we lead in deployment of fiber infrastructure over time, [and to] strengthen our already-strong wireless business.\u201d<\/p>\n Last quarter, its \u2018advanced connectivity\u2019 revenues \u2013 a mixture of fiber, fixed wireless, and mobile \u2013 grew around five percent in the second quarter, to June 30, with EBITDA up by eight percent. \u201cGrowth is coming,\u201d said Stankey. \u201cThe products, together, are a superior offering; we\u2019re able to take share in places where we weren\u2019t before, plus take natural growth in the market. This is largely on the back of putting two products together\u2026 [It means] higher household revenues, better margin performance as a consolidated account, lower churn, [stable] acquisition costs\u2026 That formula is good, and it\u2019s got legs because we\u2019re not done building footprint until the latter part of this decade.\u201d<\/p>\n At that point, the physical build-out is \u201cwrapped-up\u201d, effectively. \u201cWe\u2019ll be able to ride that chain all the way,\u201d he said, suggesting the bundling phase on top represents the \u201cearly innings\u201d in the convergence game. The whole sport gets more interesting in the middle and later sessions, he said, when convergence moves beyond bundles, discounts, and retention into the management of different access technologies. \u201cWe\u2019ll see satellite services bundled in at some point in the very near future,\u201d he said. Which is what every telco is currently working on, of course \u2013 from rivals Verizon and Lumen, to suppliers Ericsson and Ciena, to partners like Equinix and Megaport. But it ain\u2019t<\/em> so easy.\u00a0<\/p>\n \u201dIt\u2019s not the easiest task to manage the layers of a network between satellite, wireless, fixed broadband, Wi-Fi. To do that right, you start to do things to say, \u2018look, I can give you a very seamless experience from a service perspective as well as an easy experience from an account relationship billing perspective\u2019. When you start to do those things and you\u2019re giving somebody always-on connectivity, always working, very consistent \u2013 which moves [the proposition] beyond just a discount\u2026 [to] a product that works better.\u201d Stankey put forward the firm\u2019s OneConnect product as evidence of early progress \u2013 specifically to turn home broadband and mobile into a single Newer \u2018innings\u2019\u00a0<\/strong><\/p>\n In these later \u201cinnings\u201d, AT&T (et al<\/em>) will move \u201cwell beyond just an affordable price of putting the products and services together,\u201d he said. We\u2019ll address Stankey\u2019s comments, well understood, about the D2D momentarily; but the same convergence philosophy extends to its enterprise play \u2013 per its quarterly scores for \u2018advanced connectivity\u2019 revenue. There was an admission, as well, that AT&T has let it slide. \u201cOur effectiveness\u2026 lagged [versus] what we\u2019ve done on the consumer side. But many of the plays were the same\u2026 [and] we\u2019re eking out low single-digit growth\u2026 [and] doing a better job of getting fiber to the right places\u2026 [and] extending our distribution channels,\u201d<\/p>\n He added: \u201cCandidly, we lived\u2026 very much in the Fortune 300. To be more relevant in the mid-market and low end of the market, we had to do a little bit of development of capabilities. We\u2019re now starting to show some [results]. We\u2019re still early; we have more work to do, but that\u2019s what gives me confidence we can grow business [sales].\u201d Stankey said AT&T is now prepping a \u201csecond act\u201d, part of its late-phase convergence innings, where the product itself gets more sophisticated. \u201cThat\u2019s next \u2013 [about] how an [enterprise] customer can manage quality of service [and security] across layers of the network, whether [the session is] initiated on a wireless device or on a fixed connection.\u201d<\/p>\n He added: \u201cThose things are about ready to come out.\u201d Again, same for Verizon and Lumen, and everyone \u2013 and those two firms, at least, might be further down the line. The pressure is on; enterprises want AI services, and don\u2019t want to wrangle with telcos about how to get them \u2013 safely, and on time. \u201c[Some] businesses are having to think differently about how they gain access into the cloud to get to tools, augmentation of bandwidth to do those things, and finding use cases that they need support with.\u201d Meantime, there\u2019s lucrative DCI work to connect data centers, as well. Verizon has just flagged DCI deals with Google Cloud and AWS (Corning for AWS, nominally), of course.\u00a0\u00a0\u00a0<\/p>\n \u201cData-center to data-center and data-center to metro-interconnect is an area we haven\u2019t played in very actively for the last decade or so,\u201d said Stankey. \u201cWe\u2019re back in that game in spots where it makes sense for us to do that. [But] I don\u2019t want it to become the mainstay of our business.\u201d The last reference might be a subtle broadside for Lumen, perhaps. He went on: \u201cOur business should be built on the value of getting traffic to end-user customers\u2026 But as this infrastructure gets built out, there\u2019s no reason we shouldn\u2019t participate\u2026 where we have routes we\u2019re happy to build for our own traffic\u2026 [and] at a level [where we can] drop traffic into any cloud provider\u2019s infrastructure.\u201d<\/p>\n Primary business<\/strong><\/p>\n AT&T wants enough interconnect capacity to support its primary business, to connect its customers to their workloads \u2013 in other words. Which means making sure fixed and mobile traffic reaches the right cloud infrastructure with the right latency and reliability \u2013 easier on \u201csymmetrical\u201d fiber systems than on asymmetrical mobile ones, where downlink and uplink channels are differently specified, and broad spectrum holdings dictate variable performance. \u201cIn the wireless business, it\u2019s going to require a little more tuning. Upstream is going to be much more important\u2026 Low-band spectrum [with an] engineered uplink\u2026 is going to be really critical.\u201d<\/p>\n In July, AT&T completed a $23 billion deal for 30 MHz of 3.45 GHz mid-band spectrum, valuable for additional 5G capacity, and 20 MHz of 600 MHz low-band spectrum, extending coverage and strengthening uplink capability. AT&T started to deploy the 3.45 GHz spectrum under a short-term spectrum-manager lease before the transaction formally closed; by November 2025, it had nearly 23,000 cell sites, covering more than 5,300 cities in 48 states. It has selected Ericsson\u2019s 600 MHz dual-band radios with 8RX to deploy the latter.\u00a0<\/p>\n Stankey referenced use cases \u201clike autonomy [and] robotics\u201d, plus \u201cvideo processing upstream\u201d, going \u201cinto the cloud for analysis\u201d. He said: \u201cThose applications are being seen very actively right now in the market. Those are all good things for us.\u201d On the flipside, and for the record here, AT&T\u2019s own internal AI usage has focused on \u201cmeat and potato stuff\u201d like AI-assisted \u201cflows into call centers\u201d, where \u201ccustomer satisfaction is high, effectiveness is high\u201d, plus for certain business support areas and \u201csoftware development shops\u201d (higher productivity, rather bottom line savings). AI is starting to be applied to churn forecasting and more dynamic \/ bespoke customer offers.<\/p>\n Stankey said: \u201cWhen you do some of the meat and potatoes like managing customer service functions, handling customers better, being more efficient on engineering, you don\u2019t need frontier models. You can do [it with] last year\u2019s chips and some pretty good open source models. We\u2019re getting good at apportioning workloads to say what requires the high-end investment in frontier models and important chips versus\u2026 more streamlined infrastructure. We feel good about the returns we\u2019re getting as a result.\u201d But all of this \u2013 the big infrastructure build-out, familiar convergence bundling, early internal AI workloads \u2013 lead to the same place: a converged network offer for a new AI economy.\u00a0<\/p>\n Satellite furore<\/strong><\/p>\n And it leads us back to D2D satellites, as well \u2013 about which there is such a noise in the market, presently. Stankey made the same point that the bosses of most legacy telcos have made: that satellite is a niche complement tech, and not an all-conquering replacement \u2013 as the Starlink messaging goes. Stankey responded: \u201cThere\u2019s certainly roles for satellites beyond just mobile. But relative to [mobile, which is] the center of attention right now: 98 percent of [mobile] use cases are solved by infrastructure that\u2019s out there and working today, much of which is built over the course of decades. We started putting robust infrastructure in high-rise buildings and stadiums 20 years ago.\u201d\u00a0<\/p>\n That has been a \u201cconsistent drumbeat\u201d, he said, pounded-out by the traditional telecoms industry \u2013 to the point that \u201csomeone at a World Cup game [can post on] social media\u2026 flawlessly\u201d. \u201cThat doesn\u2019t just happen overnight,\u201d said Stankey, and took aim at \u201cthe notion that really small cells, randomly deployed, are going to somehow fix that problem\u201d. Good fiber is the key, and terrestrial mobile networks are closer to it than low-Earth orbit (LEO) networks. \u201cOnce you hit the fiber, nothing\u2019s ever going to beat it. And that includes the short hop from a device to a cellular antenna \u2013 which is a lot shorter than a hop to something that\u2019s 300 miles above us.\u201d<\/p>\n He added: \u201cThe faster you can get that into a fiber, and the more actively you manage it across both fixed and wireless, the better the experience is going to be\u2026 There are use cases where satellites will be very well suited. But we address the bulk of them on [our] infrastructure.\u201d Stankey referenced its planned three-way joint venture in the US with T-Mobile and Verizon to pool spectrum resources, develop technical specifications, collaborate with multiple D2D providers, and make satellite connectivity more seamless when terrestrial coverage disappears. \u201cWe\u2019re all in the same position: we\u2019re addressing 98% of the use cases. We want to make sure we can get the last two percent.\u201d<\/p>\n![\"AT&T](\"https:\/\/rcrwireless.com\/wp-content\/uploads\/2026\/09\/jts-STORY-BANNER-850x500-1.jpg\" "\\"Metro")