How AT&T Makes Money

Communications segment generates the most revenue and profits

AT&T Inc. (T) is one of the biggest telecommunications companies in the world. It operates as a holding company that provides telecommunications, media, and technology services globally. AT&T offers a broad range of products and services that vary by market, and it operates through three reportable business segments: Communications; WarnerMedia; and Latin America.

AT&T faces considerable competition from companies offering wireless, video and broadband, voice and data, media, and advertising services. Major competitors include Verizon Communications Inc. (VZ), T-Mobile US Inc. (TMUS), U.K.-based Vodafone Group PLC (VOD), and Germany-based Deutsche Telekom AG (DTEGY).

Key Takeaways

  • AT&T offers telecommunications, media, and technology services.
  • Its communications segment generates most of its revenue and profits.
  • AT&T has been divesting its entertainment businesses to focus on its core telecom operations.
  • AT&T will spin off its WarnerMedia business, which will combine with Discovery, creating a new global entertainment business that is 71% owned by AT&T shareholders.

AT&T's Financials

AT&T announced in late January financial results for Q4 of its 2021 fiscal year (FY), the three-month period ended Dec. 31, 2021. The company posted net income attributable to its common stockholders of $5.0 billion, a significant improvement from the net loss of $13.9 billion reported in the year-ago quarter. Revenue was down 10.4% year over year (YOY) to $41.0 billion.

AT&T's revenues are comprised of two main categories: services and equipment. Services accounted for about 83% of companywide revenue during the fourth quarter while equipment accounted for the remaining 17%. The decline in overall revenue was entirely driven by a decline in services revenue, slightly offset by an increase in equipment revenue compared to the year-ago quarter. Operating income, which the company uses as a profitability metric for its individual business segments, was $5.3 billion in the fourth quarter, a significant turnaround from the operating loss of $10.7 billion in the year-ago quarter.

AT&T's Business Segments

AT&T operates through three main business segments: Communications, WarnerMedia, and Latin America. It provides a breakdown of revenue and operating income for each of these segments. The company also reports results for a Corporate and Other segment, which reconciles the results for the three segments above with AT&T's consolidated results and includes various corporate expenses, acquisition-related items, eliminations and consolidations, and certain other significant items. The pie charts above do not include amounts from this Corporate and Other category nor any negative amounts from the company's three primary business segments.


The Communications segment offers a broad range of bundled products to businesses and consumers. The segment includes the following units: Mobility, which provides wireless service and equipment; Business Wireline, which provides advanced IP-based services as well as traditional voice and data services to business customers; and Consumer Wireline, which provides Internet and legacy telephony voice communication services to residential customers.

Operating income for the Communications segment grew 1.4% YOY to $6.5 billion in Q4 FY 2021. The segment comprises the majority, or about 80%, of total operating income across all segments. Quarterly revenue rose 2.4% YOY to $30.2 billion, accounting for about 73% of total revenue.


The WarnerMedia segment develops, produces, and distributes feature films, television, gaming, and other content through a range of physical and digital formats. Its content is distributed via basic networks, direct-to-consumer or theatrical, TV content, and games licensing.

Operating income for the WarnerMedia segment declined 37.9% YOY to $1.6 billion in Q4 FY 2021, comprising nearly 20% of the total across all segments. Segment revenue rose 15.4% YOY to $9.9 billion, accounting for about 24% of the total.

Latin America

The Latin America segment provides wireless services and equipment to customers in Mexico. The segment also previously provided video services in Latin America and the Caribbean. But it no longer does so after the disposition of Vrio in November 2021.

The Latin America segment posted an operating loss of $79 million in Q4 FY 2021, a little less than half the operating loss of $165 million reported in the year-ago quarter. Quarterly revenue fell 29.0% YOY to $1.1 billion, comprising about 3% of total revenue for all segments.

AT&T's Recent Developments

On Feb. 1, 2022, AT&T announced that it would divest its WarnerMedia business through a spinoff that would give shareholders a 0.24 share of the newly formed Warner Bros.-Discovery combination for each AT&T share they own. AT&T shareholders will own 71% of the combined entity. AT&T also said it would cut its annual dividend payout by nearly half. The agreement to merge AT&T's WarnerMedia assets with Discovery was first announced in May 2021. The spinoff would complete the company's exit from the entertainment business, allowing it to focus on its core telecom operations.

Article Sources
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  1. AT&T Inc. "Form 10-K for the fiscal year ended December 31, 2021," Pages 1 & 2.

  2. AT&T Inc. "Form 10-K for the fiscal year ended December 31, 2021," Pages 11 & 12.

  3. AT&T Inc. "Form 8-K dated Jan. 26, 2022," Page 1.

  4. AT&T Inc. "Form 10-K for the fiscal year ended December 31, 2021," Page 2.

  5. AT&T Inc. "Form 8-K dated Jan. 26, 2022," Pages 13 & 14.

  6. AT&T Inc. "AT&T’s WarnerMedia and Discovery, Inc. Creating Standalone Company by Combining Operations to Form New Global Leader in Entertainment."

  7. The Wall Street Journal. "AT&T Sets WarnerMedia Spinoff Plan and Lowers Its Dividend."