What changed in this filing

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Item 1. Business

2025-02-12 compared with 2024-02-23 · 62 added, 65 removed, 183 unchanged (41% of the section changed)

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In connection with the merger, we changed the name of our company from “SBC Communications Inc.” to “AT&T Inc.”

• In 2006, we acquired ILEC BellSouth Corporation (BellSouth), which included BellSouth’s 40 percent economic interest in AT&T Mobility LLC (AT&T Mobility), formerly Cingular Wireless LLC, resulting in 100 percent ownership of AT&T Mobility.

• In 2006, we acquired ILEC BellSouth Corporation (BellSouth), which included BellSouth’s 40% economic interest in AT&T Mobility LLC (AT&T Mobility), formerly Cingular Wireless LLC, resulting in 100% ownership of AT&T Mobility.

• In 2014, we completed the acquisition of wireless provider Leap Wireless International, Inc.

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video operations, and began accounting for our investment in DIRECTV under the equity method.

In September 2024, we agreed to sell our remaining interest in DIRECTV to TPG, which we expect to close in mid-2025.

• In April 2022, we completed the separation of our WarnerMedia business in a Reverse Morris Trust transaction (WarnerMedia/Discovery Transaction).

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Our reportable segments are organized as follows:

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the U.S.

and businesses globally.

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the United States and businesses globally.

Our business strategies reflect integrated product offerings that cut across product lines and utilize shared assets.

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• Mobility provides nationwide wireless service and equipment.

• Business Wireline provides advanced ethernet-based fiber services, IP Voice and managed professional services, as well as traditional voice and data services and related equipment to business customers.

• Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services to residential customers in select locations and our fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.

• Business Wireline provides advanced ethernet-based fiber services, fixed wireless services, IP Voice and managed professional services, as well as legacy voice and data services and related equipment, to business customers.

• Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services, and our fixed wireless access product (AT&T Internet Air or “AIA”) that provides internet services delivered over our 5G wireless network, to residential customers in select locations.

Consumer Wireline also provides legacy telephony voice communication services.

The Latin America segment provides wireless services and equipment in Mexico.

Corporate support costs, including administrative support costs borne by AT&T where business units do not influence decision making, divested businesses and results from business no longer integral to our operations are reported as Corporate and Other , which reconciles our segment results to consolidated operating income and income before income taxes.

The Latin America segment provides wireless service and equipment in Mexico.

Corporate support costs, including administrative support costs borne by AT&T where business units do not influence decision making and results from business no longer integral to our operations are reported as Corporate and Other , which reconciles our segment results to consolidated operating income and income before income taxes.

Areas of Focus

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Our integrated telecommunications network utilizes different technological platforms to provide instant connectivity at the higher speeds made possible by our fiber network expansion and wireless network enhancements.

Streaming, augmented reality, “smart” technologies and user generated content are expected to continue to drive greater demand for broadband and capitalize on our fiber and 5G deployments.

During 2024, we plan to continue to develop and provide high-value, integrated mobile and broadband solutions.

In December 2023, we announced plans to collaborate with Ericsson to lead the U.S.

Streaming, augmented reality, “smart” technologies, user generated content and artificial intelligence (AI) are expected to continue to drive greater demand for broadband, which we believe will allow us to capitalize on our fiber and 5G deployments.

During 2025, we are focused on the core capabilities of our products, our infrastructure and our network.

Our concentration is to aggregate the most traffic on the largest, lowest marginal cost, converged network through efficient spectrum deployment and construction of the largest high-capacity broadband solutions in the United States, while also working with regulators and customers to decommission high-cost legacy technologies over the next several years.

During 2024, we collaborated with Ericsson to lead the U.S.

in commercial scale open radio access network (Open RAN) deployment to build a more robust ecosystem of network infrastructure providers and suppliers, fostering lower network costs, improved operational efficiencies and allowing for continued investment in our fast-growing broadband network.

We plan for about 70% of our wireless network traffic to flow across open-capable platforms by late 2026, and to have fully-integrated Open RAN sites operating starting in 2024.

We plan for about 70% of our wireless network traffic to flow across open-capable platforms by late 2026.

Beginning in 2025, we expect to scale this Open RAN environment throughout our wireless network in coordination with multiple suppliers.

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To support higher mobile data usage, our priority is to best utilize a wireless network that has sufficient spectrum and capacity to support these innovations on as broad a geogra phic basis as possible.

We expect to continue to invest significant capital in expanding our network capacity, as well as obtaining additional spectrum that meets our long-term needs.

We participate in FCC spectrum auctions and have been redeploying spectrum previously used for more basic services to support more advanced mobile internet services.

We expect to continue to invest significant capital in expanding our network capacity, as well as obtaining additional spectrum, when available, that meets our long-term needs.

We participate in FCC spectrum auctions and have been redeploying spectrum previously used for more basic services to support

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more advanced mobile internet services.

Additionally, in November 2024, we agreed to purchase select spectrum licenses from United States Cellular Corporation (UScellular) for approximately $1,000, subject to closing conditions, including the consummation of UScellular’s proposed sale of its wireless operations and select spectrum assets to T-Mobile US, Inc.

In North America, our network covers over 440 million people with 4G LTE and over 314 million with 5G technology.

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Our virtualized network supports next-generation applications like 5G and broadband-based services quickly and efficiently.

At December 31, 2024, we had 15.3 million broadband connections, compared to 15.1 million broadband connections in the prior year.

Copper Decommissioning While building the network of the future, we are actively working to exit our legacy copper network operations across the large majority of our wireline footprint.

Our exit strategy includes migrating customers to fiber and wireless alternatives, and working with policy-makers to decommission our inefficient and less reliable copper network.

At December 31, 2024, we had 3.3 million network access lines in service and 127,000 DSL subscribers compared, to 4.2 million network access lines in service and 210,000 DSL subscribers in the prior year.

BUSINESS OPERATIONS

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Communications and Latin America.

Additional information about our segments, including financial information, is included under the heading “Segment Results” in Item 7.

and in Note 4 of Item 8.

Additional information about our segments, including financial information, is included under the heading “Segment Results” in Item 7 and in Note 4 of Item 8.

COMMUNICATIONS

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and businesses globally.

Our Communications services and products are marketed under the AT&T, AT&T Business, Cricket, AT&T PREPAID SM and AT&T Fiber brand names.

The Communications segment provided approximately 97% of 2023 segment operating revenues and accounted for all of our 2023 total segment income.

Our Communications services and products are marketed under the AT&T, AT&T Business, Cricket, AT&T PREPAID SM , AT&T Fiber and AT&T Internet Air brand names.

The Communications segment provided approximately 97% of 2024 segment operating revenues and accounted for substantially all of our 2024 total segment operating income.

This segment contains the Mobility, Business Wireline and Consumer Wireline business units.

Mobility – Our Mobility business unit provides nationwide wireless services to consumers and wholesale and resale wireless subscribers located in the United States by utilizing our network to provide voice and data services, including high-speed internet over wireless devices.

We classify our subscribers as either postpaid, prepaid, connected device or reseller.

As of December 31, 2023, we served 242 million Mobility subscribers, including 87 million postpaid (71 million phone), 19 million prepaid, 7 million reseller and 128 million connected devices.

Mobility – Our Mobility business unit provides nationwide wireless service to consumers and wholesale and resale wireless subscribers located in the United States by utilizing our network to provide voice and data services, including high-speed internet over wireless devices.

We classify our subscribers as either postpaid, prepaid or reseller.

As of December 31, 2024, we served 118 million Mobility subscribers, including 89 million postpaid (73 million phone), 19 million prepaid and 10 million through resellers.

Our Mobility business unit revenue includes the following categories:

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We offer unlimited plans that include features allowing for the sharing of voice, text and data across multiple devices, which attracts subscribers from other providers and helps minimize subscriber churn.

Customers in our “connected device” category (e.g., users of monitoring devices and automobile systems) generally purchase those devices from third-party suppliers that buy data access supported by our network.

We continue to upgrade our network and coordinate with equipment manufacturers and application developers to further capitalize on the continued growing demand for wireless data services.

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These services are offered under the Cricket and AT&T PREPAID brands and are typically monthly prepaid services.

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We sell a wide variety of handsets, wireless data cards and wireless computing devices manufactured by various suppliers for use with our voice and data services.

We also sell accessories, such as carrying cases/protective covers and wireless chargers.

We sell through our own company-owned stores, agents and third-party retail stores.

We sell online and through our own company-owned stores, agents and third-party retail stores.

We provide our customers the ability to purchase handsets on an installment basis and the opportunity to bring their own device.

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Like other wireless service providers, we also provide postpaid contract subscribers promotional equipment offers to initiate, renew or upgrade service.

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Business Wireline – Our Business Wireline business unit provides services to business customers, including multinational corporations, small and mid-sized businesses, governmental and wholesale customers.

Business Wireline – Our Business Wireline business unit provides services to business customers, including multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.

Our Business Wireline business unit revenue includes the following categories:

service and equipment.

We offer advanced IP-based services, such as Virtual Private Networks (VPN), AT&T Dedicated Internet, and Ethernet as well as traditional data services, cloud solutions, outsourcing and managed professional services.

We provide collaboration services that utilize our IP infrastructure and allow our customers to utilize the most advanced technology to improve their productivity.

We offer fiber and other advanced connectivity services, such as AT&T Dedicated Internet, fiber ethernet and broadband, fixed wireless, and hosted and managed professional services, as well as legacy voice and other transitional services comprised of copper-based voice and data, Virtual Private Networks (VPN), wholesale, outsourcing and IP sales.

Historically, a majority of our Business Wireline service revenues came from legacy copper-based voice and data and traditional products;

however, over recent years those services have been declining due to secular pressures.

We continue to reconfigure our wireline network to take advantage of the latest technologies and services, and rely on our SDN and NFV to enhance business customers’ digital agility in a rapidly evolving environment.

Some of the services we have offered historically are in secular decline and, going forward, we will focus on our owned and operated connectivity services powered by 5G and fiber.

Some of the services we have offered historically are in secular decline and, going forward, we will focus on our owned and operated connectivity services powered by 5G and fiber as well as evaluating opportunities where we can turn down existing copper infrastructure.

Equipment revenues include customer premises equipment.

Consumer Wireline – Our Consumer Wireline business unit provides broadband services, including fiber connections, and legacy telephony voice communication services to customers in the United States by utilizing our IP-based and copper wired network.

Additionally, this business unit offers AT&T Internet Air, which is a fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.

Consumer Wireline – Our Consumer Wireline business unit provides broadband services, including fiber connections, AIA and legacy telephony voice communication services, to customers in the United States by utilizing our IP-based and copper wired network.

Our Consumer Wireline business unit revenue includes the following categories:

broadband, legacy voice and data services and other service and equipment.

Broadband Services

We provide broadband and internet services to approximately 15 million customer locations, with 8 million fiber broadband connections at December 31, 2023.

With changes in video viewing preferences and the impacts of remote work and learning trends, we are experiencing increasing demand for high-speed broadband services.

Broadband Service

We provide broadband and internet services to approximately 14.1 million customers, including 9.3 million fiber broadband subscribers at December 31, 2024.

With changes in video viewing preferences and the impacts of remote learning trends, we are experiencing increasing demand for high-speed broadband services.

We believe our investment in expanding our industry-leading fiber network positions us to be a leader in wired connectivity.

With our focus on fiber that brings efficiencies and owner economics, we continue to evaluate opportunities where we can turn down existing copper infrastructure.

Our focus on fiber brings owners economics and expected efficiencies while we continue to evaluate opportunities where we can turn down existing copper infrastructure.

We believe that our flexible platform, with a broadband and wireless connection, is the most efficient way to transport direct-to-consumer video and data experiences both at home and on mobile devices.

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Revenues from our traditional voice services continue to decline as customers switch to wireless or VoIP services provided by us, cable companies or other internet-based providers.

Other Services and Equipment

Other Service and Equipment

Other service revenues include VoIP services, customer fees and equipment.

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LATIN AMERICA

Our Latin America segment provides wireless services in Mexico.

Our Latin America segment provides wireless service in Mexico.

We utilize our regional and national wireless networks in Mexico to provide consumer and business customers with wireless data and voice communication services.

The Latin America segment provided approximately 3% of 2024 segment operating revenues and less than 1% of our 2024 total segment operating income.

We divide our revenue into the following categories:

service and equipment.

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We provide postpaid and prepaid wireless services in Mexico to approximately 24 million subscribers under the AT&T and Unefon brands.

Postpaid services allow for (1) no annual service contract for subscribers who bring their own device or purchase a device on installment and (2) service contracts for periods up to 36 months for subscribers who purchase their equipment under the traditional device subsidy model.

We also offer prepaid services to customers who prefer to pay in advance.

Postpaid service allows for (1) no annual service contract for subscribers who bring their own device or purchase a device on installment and (2) service contracts for periods up to 36 months for subscribers who purchase their equipment under the traditional device subsidy model.

We also offer prepaid plans.

We sell a wide variety of handsets, including smartphones manufactured by various suppliers for use with our voice and data services.

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Additional information on our Latin America segment is contained in the “Overview” section of Item 7.

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MAJOR CLASSES OF SERVICE

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Equipment 1 1 1

Corporate and Other

Video services 1

video operations were separated in July 2021.

Additional information on our geographical distribution of revenues is contained in Note 4 of Item 8.

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While the FCC has generally renewed licenses, the FCC has authority to both revoke a license for cause and to deny a license renewal if a renewal is not in the public interest.

Additionally, while wireless communications providers’ prices and service offerings are generally not subject to regulation, the federal government and various states periodically consider new regulations and legislation relating to various aspects of wireless services.

Additionally, while wireless communications providers’ prices and service offerings have historically not been subject to prescriptive regulation, the federal government and various states periodically consider new regulations and legislation relating to various aspects of wireless services.

The Communications Act of 1934 and other related laws give the FCC broad authority to regulate the U.S.

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Our subsidiaries operating outside the United States are subject to the jurisdiction of national and supranational regulatory authorities in the market where service is provided.

For a discussion of significant regulatory issues directly affecting our operations, please see the information contained under the headings “Operating Environment Overview” and “Regulatory Landscape” of Item 7, which information is incorporated herein by reference.

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For a discussion of significant regulatory issues directly affecting our operations, please see the information contained under the headings “Operating Environment and Trends of the Business” and “Regulatory Landscape” of Item 7, which information is incorporated herein by reference.

IMPORTANCE, DURATION AND EFFECT OF LICENSES

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Many of our subsidiaries also hold government-issued licenses or franchises to provide wireline or wireless services.

Additional information relating to regulations affecting those rights is contained under the heading

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“Operating Environment Overview,” of Item 7.

Additional information relating to regulations affecting those rights is contained under the heading “Operating Environment and Trends of the Business” of Item 7.

We actively pursue patents, trademarks and service marks to protect our intellectual property within the United States and abroad.

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We compete for customers based principally on service/device offerings, price, network quality, coverage area and customer service.

Broadband The desire for high-speed data on demand, including video, is continuing to lead customers to terminate their traditional wired or linear services and use our fiber services or competitors’ wireless, satellite and internet-based services.

Broadband The desire for high-speed data on demand, including video, is continuing to lead customers to terminate their traditional wired or copper-based services and use our fiber or fixed wireless services or competitors’ wireless, satellite and internet-based services.

markets, we compete for customers with large cable companies and wireless broadband providers for high-speed internet and voice services.

Legacy Voice and Data We continue to lose legacy voice and data subscribers due to competitors (e.g., wireless, cable and VoIP providers) who can provide comparable services at lower prices because they are not subject to traditional telephone industry regulation (or the extent of regulation they are subject to is in dispute), utilize different technologies or promote a different business model (such as advertising-based).

markets, we compete for customers with large cable companies and other smaller telecommunications companies for both long-distance and local services.

Legacy Voice and Data We continue to lose legacy voice and data subscribers due to industry-wide secular declines and competitors (e.g., wireless, cable and VoIP providers) who can provide comparable services at lower prices because they are not subject to traditional telephone industry regulation (or the extent of regulation they are subject to is in dispute), utilize different technologies or promote a different business model.

markets, we compete for customers with large cable companies and other smaller telecommunications companies.

Additionally, we provide local and interstate telephone and switched services to other service providers, primarily large internet service providers using the largest class of nationwide internet networks (internet backbone), wireless carriers, other telephone companies, cable companies and systems integrators.

These services are subject to additional competitive pressures from the development of new technologies, the introduction of innovative offerings and increasing satellite, wireless, fiber-optic and cable transmission capacity for services.

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RESEARCH AND DEVELOPMENT

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HUMAN CAPITAL

Number of Employees As of January 31, 2024, we employed approximately 149,900 persons.

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Number of Employees As of December 31, 2024, we employed approximately 140,990 persons.

Employee Development We believe our success depends on our employees’ success and that all employees must have the skills they need to thrive.

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Labor Contracts Approximately 43% of our employees are represented by the Communications Workers of America (CWA), the International Brotherhood of Electrical Workers (IBEW) or other unions.

After expiration of the collective bargaining agreements, work stoppages or labor disruptions may occur in the absence of new contracts or other agreements being reached.

The main contracts set to expire in 2024 include the following:

a contract covering approximately 5,000 Mobility employees in Arkansas, Kansas, Missouri, Oklahoma and Texas is set to expire in February;

a wireline contract covering approximately 8,500 employees in California and Nevada is set to expire in April;

and three wireline contracts covering approximately 15,000 employees in the southeastern United States are set to expire in August.

After expiration of collective bargaining agreements, work stoppages or labor disruptions may occur in the absence of new contracts or other agreements being reached.

The main contract set to expire in 2025 covers approximately 9,000 employees in Arkansas, Kansas, Missouri, Oklahoma and Texas and is set to expire in April.

Compensation and Benefits In addition to salaries, we provide a variety of benefit programs to help meet the needs of our employees.

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Employee Wellness We provide our employees access to flexible and convenient health and welfare programs and workplace accommodations.

We have prioritized self-care and emphasized a focus on wellness, providing flexible scheduling or time-off options and implementing technologies to enhance the remote work environment.

Diversity, Equity and Inclusion We believe that championing diversity and fostering inclusion does more than just make us a better company, it contributes to a world where people are empowered to be their very best.

That is why we are committed to equality and one of the reasons why our company purpose is to connect people to greater possibilities.

This focus on diversity emanates from our diverse and inclusive workforce, which is a product of our unwavering commitment to ensure that employees from any and every segment of society are treated with fairness and provided equal opportunities to advance in the company.

To have a diverse and inclusive workforce, we have put an emphasis on attracting and hiring talented people who represent a mix of backgrounds, identities and experiences.

Across the AT&T family of companies, we have employee groups that reflect our diverse workforce.

These groups are not only organized around women, people of color, faith, LGBTQ+ individuals, people with disabilities and veterans, but also around professionals who are experienced or interested in cybersecurity, engineering, innovation and project management.

We believe that when everyone’s unique story is celebrated, we are able to connect, create and innovate in real and meaningful ways.

It is important that our employees feel valued, have a sense of belonging and are fully engaged in our success.

We have prioritized self-care and emphasized a focus on wellness and providing flexible scheduling or time-off options.

Inclusion We believe that championing inclusion does more than just make us a better company, it contributes to a world where people are empowered to be their very best and it leads to a workforce that is representative of, and responsive to, the broad customer base that we serve.

That is why we are committed to inclusion and one of the reasons why our company purpose is “to connect people to greater possibilities.” This emanates from our unwavering pledge to ensure that employees feel included when they join AT&T, and are provided with opportunities for advancement, training and development to realize their full potential while working for the company.

We believe in attracting and hiring talented people who represent a mix of backgrounds and experiences.

At AT&T, we have employee groups that reflect our large and varied workforce.

These affinity groups provide opportunities for professional enrichment, leadership, community engagement, market development and networking.

It is important that our employees feel they are included, valued, and are fully engaged in our success.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business