AT&T's fiber business is the star of the show in Wednesday's third-quarter earnings report

AT&T beat earnings expectations on Wednesday.

As telecommunications investors sweat the threat of SpaceX, AT&T's latest results on Wednesday just showed that Elon Musk's company isn't denting the growth of its internet business.

In fact, AT&T (T) posted the strongest bout of internet-subscriber growth in its history during the third quarter, fueled by demand for both its fiber offerings and its fixed-wireless-access service, which leverages spare capacity from the company's mobile network.

Analysts weren't expecting AT&T to top the 400,000 mark with its fiber-subscriber growth, but the company did so with ease, adding 442,000 net new customers. It added a net of 327,000 fixed-wireless subscribers as well.

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AT&T has made a big push to expand its fiber network, by buying a mass-market fiber business from Lumen Technologies (LUMN) and also building out its footprint directly. This plays into the company's strategy of convergence, or trying to sell both internet and wireless services to customers in markets where AT&T has a home-internet presence. In those markets, 42.8% of households chose AT&T for both offerings as of the third quarter.

The company has said that customers are more likely to stay put and not leave for another provider if they get more than one service from AT&T.

In the wireless business, AT&T reported 379,000 postpaid phone net additions, a reference to subscribers who pay for phone service at the end of a billing period instead of upfront. That was about even with the FactSet consensus.

Shares of AT&T are down about 2% in premarket action on Wednesday.

AT&T posted total revenue of $32.5 billion for the third quarter, up 5.3% from a year before. Of that, $23.9 billion in revenue came from advanced connectivity-service offerings, translating to 6.1% growth.

The company turned in 65 cents in adjusted earnings per share, up from 54 cents a year before and ahead of the 60-cent FactSet consensus view. AT&T now expects $2.40 in adjusted EPS for 2026, whereas its prior target was for $2.25 to $2.35.

As for SpaceX (SPCX), the company posted its own earnings after Tuesday's closing bell, disclosing 22 million monthly users for Starlink Mobile as of the end of September. Starlink Mobile leverages satellite technology for services, but experts have said that it only makes sense for select customers, including those in rural areas.

That said, SpaceX has big dreams in the telecommunications industry, with management reiterating on the earnings call a goal for Starlink Mobile "to become a major mobile carrier in the U.S."

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-Emily Bary