(Reuters) – AT&T expects free cash flow to exceed $18 billion by 2027, the company said on Tuesday as it laid out a three-year vision for the company to expand its 5G and fiber services in the United States.
The wireless carrier aims to double the availability of fiber internet and improve its 5G network, offering customers bundled discounts on high-speed fiber data and wireless phone services.
The Dallas, Texas-based company’s efforts are in line with industry trends toward high-speed internet and have already delivered significant customer gains.
The company expects to reach more than 50 million locations with fiber by 2029. The company previously reported 28.3 million fiber optic passages, or the number of potential customer locations through which a fiber optic network runs.
The company’s unlimited plans, with benefits such as more hotspot data, led to higher-than-expected wireless subscriber growth in the third quarter.
AT&T plans to return more than $40 billion to shareholders over the next three years through dividends and share repurchases. Annual capital investments are expected to remain around $22 billion over the period.
The company raised the low end of its 2024 adjusted earnings per share forecast to between $2.20 and $2.25, compared with analyst estimates of $2.21 per share, according to data compiled by LSEG.
It outlined growth expectations for the period 2025 to 2027, excluding the 70% stake in DirecTV, which is being sold to TPG for $7.6 billion. The deal is expected to close in mid-2025.
In September, rival T-Mobile said it expects adjusted free cash flow between $18 billion and $19 billion in 2027.
From 2025 to 2027, AT&T expects annual service revenue growth in the low single digits.
(Reporting by Harshita Mary Varghese in Bengaluru: Editing by Tasim Zahid)
