The Carriers Are Beating and Getting Cheaper. Is the Satellite Threat Real?

AT&T reported its third quarter on Wednesday and gave investors most of what they ask for. Revenue rose 5.3% to $32.3 billion. Adjusted earnings came in at $0.65 a share, up from $0.54 a year earlier. The company added a record 769,000 internet customers and 379,000 postpaid phone subscribers, and it lifted its full-year profit forecast. The stock fell anyway. It has company: Verizon and T-Mobile have both slid over the past month, and the group sold off together earlier in October when SpaceX moved to buy nationwide low-band spectrum. So the market is looking at better operating results and marking the shares down. The question is why.

SpaceX is buying its way onto the phone

In early October, SpaceX agreed to acquire a nationwide block of 800 MHz low-band spectrum from Grain Management, a deal the Wall Street Journal valued at about $8 billion. Spectrum is the tell. Low-band is the kind that reaches indoors and across open country, and it is what SpaceX needs to beam cellular service directly to ordinary phones from its Starlink satellites, going beyond the dead-zone coverage it supplies today through a carrier partnership. The three big carriers dropped sharply the day the news broke. The worry analysts describe is not that Starlink signs up millions of subscribers next year. It is that a credible fourth network, bundled with home broadband, forces the incumbents to spend more on promotions and discounts to hold the customers they already have. Oppenheimer cut AT&T to the equivalent of a hold back in June, citing that exact risk to subscriber growth. Wall Street models have the growth fading on its own: one set of estimates has T-Mobile’s revenue growth sliding from 8.5% in 2025 to 2.2% by 2029, with AT&T’s annual growth under 3% across the same stretch. A 10-year Treasury yield back above 5% since mid-September compounds the problem, because it makes a telecom dividend compete with a risk-free bond.

The subscriber numbers are still climbing

Against that threat sits a business still adding customers and cash. AT&T’s 769,000 internet additions were a record, split between 442,000 fiber homes and 327,000 fixed-wireless connections. Churn barely moved, holding at 0.92% on postpaid phones. Adjusted EBITDA rose 5.4% to $12.5 billion. Free cash flow reached $5.0 billion, and the company returned about $4.8 billion to shareholders in the quarter, including $2.8 billion of buybacks, while raising its full-year adjusted-earnings target to the $2.40 range. The incumbents are not standing still on satellite either. AT&T, Verizon and T-Mobile have formed a joint venture to extend satellite coverage, which Bloomberg Intelligence has said should help blunt SpaceX’s ability to offer seamless nationwide service. T-Mobile’s own case is that terrestrial networks stay better for indoor use and dense cities, where most data actually gets consumed. John Conca, an analyst who covers the group, told Yahoo Finance the competitive risk is genuine but distant, because SpaceX would still need costly ground infrastructure to compete in those markets; he said the near-term move looked driven by sentiment, with the fundamentals largely intact. The shares are also cheap by their own history. Verizon trades near 8.5 times forward earnings against a 10-year average above 10, and T-Mobile sits close to its lowest multiple since 2012.

What the data shows

The prices describe a sector being repriced, not one company stumbling. AT&T closed Tuesday at $23.42, down 8% over the past month and 21% below its 52-week high of $29.79, though still well above the $19.89 low. Verizon, at $44.54, is off 7% on the month and 14% from its high. T-Mobile shows the deepest cut: at $157.75 it trades 43% below its 52-week high of $276.49 and barely 7% above its one-year low. All three dropped together. These are three of the larger companies in the U.S. market, worth a combined $496 billion, and the selling has lifted their dividend yields as it has dropped their prices, to about 6.4% at Verizon, 4.8% at AT&T and 3% at T-Mobile.

What would settle it

Several dated facts will turn this from argument into evidence. The read-through comes fast. Verizon and T-Mobile report their own third quarters in the days ahead, which will show whether the subscriber momentum AT&T described is an industry trend or a share gain pulled from rivals. SpaceX’s spectrum purchase still needs FCC approval and has not closed, and the agency’s decision will signal whether the fourth network is a near-term reality or a longer project. SpaceX has said it aims to start direct-to-phone trials late this year, with next-generation satellites a couple of years out. Until the spectrum clears and the first phones connect from orbit, the gap between what the carriers earn and what the market will pay for those earnings is the figure to watch.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.