Telecoms Face Major Overhaul by 2026, AT&T and T-Mobile Lead

The U.S. telecommunications industry is on the cusp of a major overhaul, with 2026 anticipated to be a critical turning point. This transformation is fueled by the rapid convergence of mobile and fixed-line services, coupled with escalating competition within the sector. Analysts have pinpointed the companies likely to thrive in this new environment, as well as those that may face challenges.

The convergence of mobile and fixed-line services is set to create a significant growth opportunity for telecommunications companies. From 2024 to 2029, the number of new fiber-optic coverage users in the U.S. is expected to surpass 55 million. This trend is poised to drive industry growth, reduce user churn, and enhance the lifetime value and profitability of wireless services.

Two companies stand out as leaders in this evolving landscape: AT&T and T-Mobile. Their success is driven by sustained investments in spectrum resources and network modernization. T-Mobile, with its extensive holdings in mid-band spectrum, is recognized for its superior network quality. AT&T, meanwhile, benefits from its leading capital investments and robust network infrastructure. Both companies have been given "buy" ratings based on their strategic positions.

In the Fixed Wireless Access (FWA) sector, T-Mobile is a frontrunner due to its leadership in low-band and mid-band spectrum resources. AT&T, while lagging in FWA investments, is expected to benefit from the phased retirement of copper cable networks, which are being gradually replaced. In markets where AT&T plans to deploy fiber, FWA will serve as a strategic entry point and transitional solution.

Verizon is also recognized for its potential, with expectations of increasing service revenue driven by growth in average revenue per user (ARPU) for postpaid wireless services. Additionally, Frontier Communications' Fios fiber business is projected to cover 35 million to 40 million users, further supporting industry growth.

On the other hand, Charter Communications and Altice USA face significant challenges due to intense competition from FWA and fiber services. Despite efforts to mitigate competition through video streaming services and digital platforms, the expanding fiber coverage and heightened industry rivalry are expected to negatively impact their operational performance. However, there is potential for improvement if these companies can enhance their product offerings and service quality.

The concept of "business integration," where cable and wireless services are bundled together, is seen as a preferred consumption model for users. This approach offers lower package prices for consumers and increases customer lifetime value for operators. AT&T, Verizon, and T-Mobile are identified as the top competitors in this area. However, the long-term benefits of business integration may be offset by broader industry trends, as cable companies continue to lose broadband users despite their bundled service offerings.