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AT&T (T) stock fell 10.9% in October, compared with a 1.1% decline for the S&P 500, even after management raised its full-year profit outlook on the October 21 call. That raised outlook came mainly from lower depreciation tied to the planned sale of AT&T Mexico. Much of October's fall came on two days of reports about SpaceX's push into U.S. mobile service: October 9, when the stock fell 9.8%, and October 23, when it fell 8.0%. Bulls point to the fiber homes AT&T keeps adding and to the wireless plans it sells to those homes. What they tend to look past is the shrinking amount AT&T collects from each of those homes. That case holds only if total revenue from those homes keeps rising even as each home pays less, but management offered a reason for doubt on the same call. So what is happening to the money AT&T makes from each fiber customer?
AT&T Is Earning Less From Each Fiber Customer
AT&T's fiber ARPU, the average revenue it earns from each fiber customer, fell 4% in the third quarter of 2026 from a year earlier. Management gave three reasons on the call: introductory prices to win new homes, discounts for converged accounts that also take AT&T wireless, and more lower-paying customers on the Quantum brand in territories bought from Lumen.
Management chose this squeeze and does not expect it to end soon. The company said fiber ARPU will show a similar decline from a year earlier in the fourth quarter. When asked on the call about broadband prices in AT&T's established fiber markets, executives steered their answer toward service revenue and customer growth. Chief executive John Stankey also said he expects good stability in fiber ARPU over time, as customers move up to faster speed tiers. Management also noted that a meaningful price increase last December had affected much of AT&T's fiber base.
So far, AT&T is adding homes fast enough to keep its home internet revenue rising. The company added 416,000 fiber customers in the third quarter, while its advanced home internet service revenue, which also includes Internet Air, grew more than 23% from a year earlier. That year-earlier comparison also spans AT&T's purchase of territories from Lumen, a deal that closed in early February.
How Much Of AT&T Is Exposed To Cheaper Fiber?
Nearly all of AT&T's revenue, or 96.2% in fiscal 2025, came from its Communications segment, which sells wireless plans as well as fiber. That share is not a fiber figure, since the segment's fiber revenue is not split out in the data here. Management said on the call that its results come from gains in subscribers and converged accounts, the customers the discounts are meant to win.
AT&T's converged accounts are still growing. Nearly 43% of its advanced home internet customers also had a postpaid wireless account at the end of the third quarter. The company added about 350,000 converged accounts in that quarter, marking a faster pace than in the second quarter.
The share price appears to assume little growth. AT&T trades at 11.1 times earnings , compared with 22.6 for the S&P 500. The stock closed on October 30 at 23.8% below its high of the past year, set on March 27.
Should AT&T Holders Worry About Cheaper Fiber?
The fall in revenue per fiber customer is a real risk, but a slow one. Management is using lower introductory prices to win homes, and so far new homes and converged accounts are both still growing.
Lower prices represent only part of what AT&T spends to win fiber homes. Management expects higher marketing and other customer acquisition costs in the fourth quarter, driven in part by its expanded push to sell fiber. If revenue per fiber home falls faster than the number of homes grows, or if the discounted homes stop adding wireless, the discounts would stop paying off.
As of the third quarter, AT&T is adding fiber and Internet Air homes fast enough to keep home internet revenue rising, and more of those homes are taking its wireless plans. AT&T's new homes will need to keep outpacing the fall in revenue per home, because management expects fiber ARPU to fall again in the fourth quarter. AT&T's fiber ARPU against a year earlier is the figure to watch when the company reports in January 2027.
How To Act On T?
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