AT&T CEO Says ‘Historical Resilience Of Demand’ Around Connectivity Will See Carrier Through Tariffs

‘I think that if ultimately costs are passed to us from those that we buy handsets from, unfortunately [for] the customer we’re going to have to come up with some new ways for them to figure out how to digest that increase in pricing,’ AT&T CEO John Stankey says about the possibility of tariffs impacting costs in the telecom market in 2025.

AT&T is watching the evolving U.S. tariff policy closely to determine if potentially rising costs of smartphones and network and technical equipment will impact consumer and business customer demand, AT&T CEO John Stankey said during the carrier’s first-quarter 2025 earnings call Wednesday morning.

Any large price increases will be passed along to the customer, the CEO said, mirroring Verizon CEO Hans Vestberg’s comments during the rival carrier’s earnings call Tuesday morning.

“I think that if ultimately costs are passed to us from those that we buy handsets from, unfortunately [for] the customer we’re going to have to come up with some new ways for them to figure out how to digest that increase in pricing,” Stankey said.

The telecom giant’s 2025 financial expectations, despite the macroeconomic uncertainty, remain unchanged following its strong first quarter, he said.

“Based on the 90-day pause on reciprocal tariffs and our visibility into the supply chain, we believe we can manage the anticipated higher costs within the 2025 financial guidance we provided at the beginning of the year. Our expectations reflect our strong financial performance in the first quarter, the historical resilience of demand for our critical conductivity services across economic cycles, and our decision to reduce discretionary expenses and accelerate cost actions that we had planned for later in this year. That said, this environment remains fluid,” he said.

Business wireline services, which includes advanced Ethernet-based fiber services, fixed wireless services, IP voice and managed professional services for business customers, continued to decline in 2025. The segment decreased 9.1 percent during the quarter to $4.47 billion and business wireline equipment stayed flat at $213 million during the first quarter. Legacy and other transitional services declined 17.4 percent to $2.48 billion. AT&T CFO Pascal Desroches said that the business wireline financial results reflect secular pressure as customers continue to transition away from legacy wireline services.

Business wireline operating costs were also down for the company following AT&T’s spinoff of its cybersecurity practice, LevelBlue, in 2024.

Business fiber and advanced connectivity services, the latter of which makes up about one-third of the segment’s revenue, on the other hand, climbed 4.5 percent to $1.78 billion.

Dallas-based AT&T Business today provides services to nearly all Fortune 1000 companies.

Reports surfaced in March that AT&T was in talks to buy Lumen Technologies’ consumer fiber operations in a deal worth more than $5.5 billion, according to people familiar with the matter. While Stankey declined to comment directly on the possible deal, the CEO said he's “always” open to the right inorganic growth activity that could help the company accelerate in the market.

“I always keep my mind open to something that I think can improve value for the shareholder that’s clear and centered on what we have laid out as key for us in the business, and that’s to be the best in connectivity,” Stankey said.

First-Quarter 2025 Results

AT&T’s mobility segment revenue totaled $21.57 billion during the quarter, a 4.7 percent increase compared with $20.59 billion in the same quarter a year ago. The overall communications business, which includes high-speed internet, video and legacy voice services, totaled $29.56 billion during the quarter compared with $28.86 billion in the first quarter of 2024, a 2.4 percent increase.

Mobility services revenue continued to climb, rising 4.1 percent to $16.65 billion, up from $15.99 billion a year ago. Mobility equipment revenue also rose 6.9 percent to $4.92 billion during the quarter compared with $4.60 billion a year ago.

Total operating revenue for the first quarter that ended March 31 was $30.63 billion, an increase of 2 percent from $30.03 billion in the same quarter one year earlier . Diluted earnings per share during AT&T’s fourth quarter was 61 cents, compared with 47 cents a year ago.

AT&T’s first-quarter 2025 results beat Wall Street’s expectations of $30.4 billion for the quarter.