AT&T’s Dividend Standoff: Yield Stability or Another Cut Waiting to Happen?

On Monday, legacy telecom provider AT&T (NYSE: T) declared its quarterly dividend of $0.2775 per T share, maintaining the same payout level it has held since February 2022. From 2004 through 2020, AT&T increased its dividend annually, typically announcing hikes each February, before that long-running streak came to an end.

The current level continues the dividend AT&T has maintained since February 2022, after cutting it from $0.52 per share. That reduction formally ended AT&T’s status as a dividend aristocrat, a designation reserved for companies that raise payouts for at least 25 consecutive years.

This uncommon break was driven by AT&T spinning off WarnerMedia and merging it with Discovery in a $43 billion deal. Since then, the company has shifted its strategic focus on core telecom operations, such as 5G and fiber-optic deployment, prioritizing balance-sheet repair.

AT&T now offers a forward dividend yield of 4.52%, with the next batch payable on February 2, 2026. The question remains whether this yield represents a stable floor or a more favorable recalibration for investors seeking passive income?

US Telecom Landscape

Out of the “Big Three” telecom players in the US – Verizon, AT&T and T-Mobile US – Verizon offers the highest dividend yield of 6.74% at a quarterly payout of $0.68 per VZ share. T-Mobile has the lowest yield of 1.95% at a $1.02 payout per TMUS share. Altogether, these three companies control nearly the entirety of the wireless market.

Suffice to say, they tend to be viewed as holding an oligopolistic position. Yet, this is the natural consequence of heavy capital requirements, licensing and network-scale economics that make meaningful new entry into the market prohibitively costly.

Led by the Big Three, according to Market Report Analytics (MRA), the US telecom industry holds a $443.12 billion market in 2025.

In early August 2025, T-Mobile completed its acquisition of UScellular’s wireless operations. Image credit: MRA

Judging by the current trends, T-Mobile may end up dominating the sector by the end of 2026, according to Roger Entner at Recon Analytics. As of Q3 2025, T-Mobile had the best-ever customer growth in the industry, having added 2.3 million net customers.

In the same quarter, Verizon suffered a 7,000 retail postpaid decline, marking it the third consecutive quarter of net customer losses. This is likely to carry on into Q4 despite the best efforts of Verizon’s new CEO Dan Schulman (former PayPal executive). In contrast, AT&T gained 405,000 postpaid net additions.

Overall, the Big Three continued to capitalize on their oligopoly in Q3.

• AT&T: $30.7 billion revenue, representing 1.6% year-over-year growth against $139.5 billion total debt.
• Verizon: $33.3 billion revenue, representing 1.5% year-over-year growth against $112 billion.
• T-Mobile US: $21.95 billion, representing 9.6% year-over-year growth against $132.4 billion total debt.

The underlying dynamic between the Big Three appears to be customer pilfering, as both Verizon and T-Mobile launched campaigns to attract competitors’ clients.

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Telecom Customer Pilfering Wars

So far, T-Mobile has been the most aggressive in its efforts to lure customers from its rivals, going as far as to provide an automated comparison tool with “Easy Switch”. In fact, in addition to AT&T blocking the tool, the company requested a legal injunction in November at Texas federal court against T-Mobile. The reasoning was that T-Mobile engaged in the harvesting of “private customer account information and AT&T business information.”

Namely, T-Mobile’s Easy Switch was requesting login credentials from both AT&T and Verizon customers in order to generate fine-tuned counteroffers. By issuing legal action, AT&T gained a reprieve as T-Mobile disabled Easy Switch until the legal matter is sorted.

This is actually a big deal because T–Mobile’s Easy Switch precision was such that the company no longer had to offer broad packages. Instead, each offer was personalized with a slightly better discount against competitors. Likewise, as one could conclude from its moniker – Easy Switch – it streamlines the switching process which is often the main hurdle for people leaving.

Verizon’s “Bring Your Bill” campaign launched for the same purpose against AT&T and T-Mobile, but it is less advanced than Easy Switch, requiring greater customer engagement.

The Bottom Line

With a 0.92% increase in postpaid churn in Q3, AT&T is doing slightly better than Verizon, but both are losing ground to T-Mobile. However, all three companies have high debt-to-EBITDA ratios: T-Mobile at 3.83, Verizon at 3.33 and AT&T’s rising above 3x following the $23 billion acquisition of spectrum licenses from EchoStar in August.

Moreover, AT&T’s Business Wireline division keeps declining, down by 7.8% YoY in Q3. Although this was somewhat offset by 6% fiber growth, it remains the case that T-Mobile lacks that legacy burden of maintaining a vast copper network that is losing relevance.

Accounting for highly competitive trends and financials, one should sooner expect to see AT&T cut its quarterly dividend payout again instead of increasing it. As for the T stock itself, it gained nearly 7% this year, presently priced at $24.31 per share.

This price level is still under the Wall Street Journal’s consensus of $30.37 as the average T price target. The low end is not far off at $22, while the ceiling price target for T stock is $34 per share.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.