According to CRN, both Verizon and AT&T reported mixed Q3 2025 earnings, missing revenue expectations despite positive overall performance. Verizon saw a dramatic 315% year-over-year revenue increase while AT&T posted a more modest 1.6% growth, with both companies experiencing significant declines in business services revenue. Verizon’s new CEO Dan Schulman, who replaced eight-year veteran Hans Vestberg in October, promised aggressive transformation during the earnings call, stating the company would overhaul culture, cost structure, and financial profile. Both carriers are pursuing major acquisitions, with Verizon’s $20 billion Frontier Communications deal and AT&T’s purchase of Lumen’s 11-state fiber business both expected to close in early 2026. This mixed performance sets the stage for significant industry realignment.
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The Schulman Leadership Gambit
Verizon’s appointment of former PayPal CEO Dan Schulman represents a fundamental shift in telecom leadership strategy. Unlike traditional telecom executives who typically rise through network engineering or operations roles, Schulman brings a fintech and digital platform perspective that could reshape Verizon’s approach to customer engagement and monetization. His background at PayPal suggests a potential focus on embedded financial services, digital wallets, and platform-based revenue models rather than traditional subscription services. However, this transition carries substantial risk – telecom operations require deep understanding of capital-intensive infrastructure investments and regulatory compliance that differ dramatically from fintech’s agile development cycles. The cultural transformation Schulman promises will likely face resistance from legacy telecom veterans accustomed to the industry’s traditional pace and priorities.
The Enterprise Services Conundrum
The continued decline in business services revenue for both carriers reveals a structural challenge in the telecommunications industry. Verizon Business saw a 2.8% revenue drop while AT&T’s business wireline services declined 7.8%, indicating that enterprise customers are increasingly shifting toward cloud-based communication platforms and software-defined wide area networks (SD-WAN). The traditional model of selling dedicated circuits and managed network services is being disrupted by cloud providers offering more flexible, consumption-based pricing. Both carriers face the challenge of transitioning from being connectivity providers to becoming digital transformation partners, requiring significant investment in cloud, security, and IoT capabilities. This transition period creates revenue pressure as legacy services decline faster than new digital services can scale.
Fiber Acquisition Calculus
The parallel acquisition strategies – Verizon’s $20 billion Frontier deal and AT&T’s Lumen fiber purchase – represent a doubling down on fiber infrastructure despite the business services headwinds. Both carriers are betting that owning last-mile fiber connectivity will provide competitive advantage in both consumer and enterprise markets. However, these acquisitions come with significant integration risks and capital requirements. Frontier’s largely rural and suburban footprint presents different operational challenges than Verizon’s existing urban and suburban concentration, while Lumen’s 11-state operation will require substantial systems integration with AT&T’s existing infrastructure. The timing is also noteworthy – both deals closing in early 2026 suggests both companies want to establish scale before potential economic headwinds or regulatory changes might complicate future M&A activity.
Wall Street’s Evolving Expectations
The fact that both companies missed Wall Street revenue expectations despite posting positive earnings reflects changing investor sentiment toward telecom stocks. Analysts are increasingly skeptical of revenue growth stories in mature markets and are focusing more on cash flow generation and capital efficiency. The market appears to be pricing in a reality where telecom companies become more like utilities – stable cash generators rather than high-growth technology plays. This puts pressure on both Verizon and AT&T to demonstrate they can maintain pricing power in wireless while managing the decline in legacy services. Schulman’s promise to transform Verizon’s financial profile suggests recognition that the company needs to tell a different story to investors beyond traditional connectivity metrics.
The Path Forward in 2026
Looking ahead to 2026, both carriers face a pivotal moment as their acquisitions close and new strategies take shape. Verizon under Schulman will likely accelerate its digital transformation initiatives, potentially including more aggressive moves into edge computing, private networks, and platform services. AT&T, having maintained leadership continuity, will probably focus on operational efficiency and fiber network integration. The key challenge for both will be balancing the substantial capital requirements of network expansion with the need to return cash to shareholders through dividends and buybacks. The telecom industry is at an inflection point where traditional metrics of success are being redefined, and both companies’ Q3 2025 results highlight the transitional nature of this period.
