AT&T reports Q2 revenues of $40.52B, up 23% YoY, profit of $3.41B, up from $3.08B a year ago; adds 2.1M wireless customers but loses 49K video customers in US
Lisa Beilfuss / Wall Street Journal :
Context & Ripple Effects
AT&T's Q2 print extends a pattern set earlier in the year: the Q1 report already showed U-Verse customers leaving faster than DirecTV was replacing them, so the 49K US video loss here is a continuation, not a new crack. The 23% YoY revenue jump also mirrors the 22% growth in Q4, when wireless revenue actually fell 4.9% — top-line expansion is coming from acquired businesses, not organic wireless pricing.
The quarter matters because it shows the post-DirecTV AT&T holding profit steady ($3.41B vs $3.08B) while its two consumer engines pull in opposite directions: 2.1M wireless adds against ongoing video erosion.
First-order effects
- AT&T's growth story now rests entirely on the DirecTV acquisition — organic wireless is adding subscribers while the legacy video base keeps shrinking, forcing management to defend a bundle that is net-negative on the TV side.
Second-order effects
- Adding 2.1M wireless customers without matching wireless revenue growth (as seen when wireless revenue dropped 4.9% in Q4) points to promotional pricing pressure that rivals must match to hold their own subscriber counts.
- Continued video attrition pushes AT&T toward streaming distribution as the replacement — a path the later DirecTV Now push, which reached 1.46M subs by Q1 2018, would formalize.
Third-order effects
- If the pattern holds — subscriber volume up, per-subscriber revenue soft, legacy TV shrinking — carriers respond by buying scale and content rather than competing on network price alone, restructuring telecom around media assets.
The trend: US telecom carriers are offsetting saturated wireless and cord-cutting through acquisition-driven scale, trading organic growth for media-asset consolidation.