ATandT Beats Forecasts: Weigh Starlink Risk Against Slower Subscriber Growth

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•  21 Oct 2026
 

$T AT&T beat revenue and earnings forecasts, raised its annual earnings outlook and expanded share buybacks to approximately $10 billion, yet its shares fell more than 5%. The stock quote showed a decline of 6.55%, underscoring how the outlook for mobile operators now extends beyond their financial results. Slower subscriber additions and rapid growth at Starlink Mobile renewed concerns about satellite competition in the mobile market.

Reported third-quarter revenue growth of 5.3% to $32.3 billion, exceeding the $31.69 billion forecast. Adjusted earnings reached 65 cents per share against expectations of 60 cents, while the company raised its 2026 earnings outlook to approximately $2.40 per share from $2.25–$2.35. AT&T also reaffirmed its annual dividend of $1.11 per share. Based on the Tuesday closing price, that represents a dividend yield of approximately 4.7%, substantially above the S&P 500 yield.

Chief Executive John Stankey announced that AT&T would accelerate share buybacks this year to approximately $10 billion, reinforcing the positive message from its earnings momentum. He presented the move as an expression of confidence in its competitive position and ability to generate cash flow. Investors instead focused on postpaid mobile subscriber additions. AT&T added 379,000 such subscribers during the quarter, broadly within expectations but below the 432,000 added in the previous quarter.

Postpaid subscribers are particularly important to mobile operators because they provide stable, recurring monthly revenue. Even a moderate slowdown in additions can therefore signal emerging price competition or erosion in pricing power. That gives the latest AT&T figure greater significance as SpaceX expands Starlink Mobile and seeks to establish itself as a communications provider capable of bypassing part of the traditional mobile infrastructure.

SpaceX announced after the results were released that Starlink Mobile had surpassed 22 million monthly users, up 37% from the previous quarter. That does not yet make it a full substitute for AT&T, Verizon or T-Mobile. Its growth rate is nevertheless sufficient for the market to begin assigning it strategic significance.

The concern is that Starlink will gradually capture uses where traditional operators previously held an almost absolute advantage. Direct satellite connections to devices can improve coverage in remote areas, along roads and in locations where deploying cell towers is expensive or uneconomic. The threat centers on that gradual shift rather than an immediate replacement of existing mobile networks.

Elon Musk also argued that established mobile operators still view competition through the existing market structure while SpaceX develops new tools that change the rules. The stock market reaction shows investors are taking that possibility seriously. Verizon and T-Mobile shares also fell approximately 2.7%, demonstrating that the pressure extends beyond AT&T. The market is repricing the entire sector around whether satellite services can evolve from a complementary product into a direct competitor in parts of the business.

The market is currently less impressed by the ability of AT&T to beat forecasts for a single quarter than concerned about whether subscriber additions will remain strong as competition expands beyond the three largest mobile operators. That explains why the higher outlook, dividend and billions of dollars in buybacks failed to stabilize the stock. These measures support shareholder returns, but they do not answer what happens to mobile revenue if new entrants begin capturing part of the growth.

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