U.S. cable, telecom, communications infrastructure and media sectors: UBS sees telecom share gains and infrastructure demand offset by worsening cable and linear-TV pressure

Overview

This UBS marketing deck surveys U.S. broadband, wireless, communications infrastructure, data centers, Canadian telecom, U.S. media and music. Its central message is differentiated: fiber, fixed wireless, AI-related infrastructure and direct-to-consumer media offer growth paths, while cable broadband and linear television face mounting competitive and structural pressure.

Core views

UBS expects fixed wireless access (FWA) to remain the principal source of U.S. broadband net additions despite a slower near-term run rate. The firm projects more than 25 million FWA subscribers in 2028, compared with roughly 16 million at year-end 2025, implying that FWA continues to capture more than 100% of industry net additions. Wireless operators added 884,000 FWA subscribers in the latest quarter, the lowest level since 2022 and below the 900,000 to more than 1 million pace of recent quarters; UBS models roughly 900,000 quarterly net additions for the rest of the year and 3.6 million additions in 2026 versus 4.0 million in 2025. Slower Verizon and T-Mobile growth is expected to be partly offset by AT&T, whose continuing push makes it the only major mobile-network operator still actively pursuing FWA growth. Fiber is the other key telecom share-gain driver. UBS forecasts about 2.85 million fiber net additions in 2026, up from about 2.48 million in 2025, and expects AT&T and Verizon to secure roughly 75% of industry fiber additions. Fiber build activity is projected to reach 9.1 million passings in 2026, versus 8.6 million in 2025 and 8.2 million in 2024, before exceeding 10 million annually in 2027. Recently completed acquisitions make 2026 a transition year for AT&T and Verizon, but UBS expects a second-half acceleration and an exit rate above 10 million passings per year. The report argues that telco fiber growth is now materially exceeding DSL losses, leaving telcos as broadband share takers. UBS presents AT&T as its broadband top pick. The report argues that retention and cost benefits from convergence allow aggressive fiber acquisition pricing: AT&T generates about $160 per month of postpaid wireless ARPA and $70 of fiber ARPU, including an approximately 15% bundled discount. UBS estimates blended ARPA of $150 per month and $215 per month for a converged account. If AT&T reaches 45% fiber penetration while maintaining a 45% converged-fiber mix, UBS sees potential for more than 30 million broadband subscribers and more than 14 million converged subscribers—36% and 31%, respectively, above its current 2030 estimates. The Lumen acquisition added about 1.1 million fiber subscribers across about 4.5 million passings, or around 25% penetration; UBS believes AT&T could move terminal penetration above 50%, in line with mature markets. The cable outlook is less favorable. UBS says FWA share gains, telco convergence and a cable pricing reset have compressed prices and eliminated industry broadband revenue growth. Cox rate resets and anticipated Starlink price reductions suggest that this condition may continue into 2027. The report expects fixed-telco additions, net of DSL losses, to offset sequentially lower FWA adds and contribute to somewhat worse cable subscriber losses. Comcast faces revenue declines from subscriber losses and back-book repricing, while Charter's comparatively better EBITDA performance is supported by video trends and wireless EBITDA offsetting underlying high-speed-data pressure. UBS also expects Starlink to become a meaningful U.S. competitor in late 2027 if Starship and Starlink v3 reduce cost per bit by up to 100 times. In wireless, UBS sees industry competition stabilizing as the competitive focus moves toward broadband. It expects low-single-digit EBITDA growth for AT&T as converged offers support margin expansion. Carriers have 4.5-5.5 times as much sub-6 GHz spectrum as SpaceX, and T-Mobile remains the spectrum-holder leader; Verizon's Auction 113 AWS-3 licenses strengthen its position. Wireless capital expenditure is expected to decline slightly over the next two years after the record $42 billion spent in 2022, as carriers deploy some acquired spectrum through software upgrades. Longer term, spectrum deployment, densification and the prospective Upper C-Band auction are expected to revive spending. For towers, UBS describes a near-term capex lull but durable underlying demand. Higher wireless capex generally leads to greater tenant billings, although long-term master lease agreements help keep organic growth relatively stable during capex step-downs. Domestic contracts are typically non-cancellable for five to ten years with five-year renewal periods. Churn from Dish, Sprint and USM is expected to depress industry growth in the near term, but UBS expects mid-single-digit growth to return in 2027 and beyond as carriers deploy spectrum and continue densification. AI diffusion could add upside to data-usage growth and potentially require network reconstruction, which UBS views as positive for towers. The data-center section is constructive. UBS says third-party capacity is increasingly an execution and capital off-take mechanism for hyperscalers, while neoclouds, AI labs and AI accelerator providers broaden the tenant base. UBS estimates hyperscale capital expenditure will surpass $1 trillion in 2027. Power, labor and equipment lead times constrain supply and therefore limit the risk of overbuilding. Primary markets have vacancy below 2%, with large capacity blocks generally pre-leased well ahead of delivery; power availability is the main bottleneck. These conditions are shifting demand toward secondary and tertiary markets, where latency is less critical for AI model training, and are supporting higher rental rates and scarcity-driven pricing power. In U.S. media, UBS sees merger logic and streaming scale alongside major legacy-TV challenges. A potential Paramount Skydance/Warner Bros. Discovery combination would join two top-five studios, target more than $6 billion of cost savings—11% of combined operating expense—and provide scope to moderate approximately $30 billion of annual pro forma cash content spending. However, linear TV would still account for roughly two-thirds of EBITDA and 45% of revenue, leaving substantial exposure to a shrinking business. The combined company would have about 7% of U.S. streaming viewership, versus 8% for Prime, 10% for Disney and 19% for Netflix. UBS expects the linear-TV downturn to continue even as sports and cyclical 2026 events offer partial support. Traditional TV viewership fell 12% in 2025, and the P55+ demographic now represents 71% of traditional-TV consumption versus 56% five years earlier; the A18-49 demographic continues to decline at a mid-teens pace. The report expects core advertising at Fox and Disney to be stable to slightly positive, NBCU and Paramount to post mid-single-digit declines, and Warner Bros. Discovery and AMC Networks to see high-single-digit to low-double-digit declines. Pressure on advertising and affiliate revenues, sports-rights inflation and revenue allocation toward DTC are expected to accelerate linear-TV EBITDA declines. Streaming offers the counterweight. Streaming surpassed linear viewing in 2025, and UBS expects continued price increases to keep industry DTC revenue growth in the mid-teens. Roku is described as a major beneficiary of free-streaming growth, while Peacock is expected to outperform in 2026 with price increases, the Winter Olympics and NBA rights. UBS forecasts roughly $1 billion of Peacock advertising revenue additions in 2026 and models Netflix's UCAN advertising revenue doubling from about $1 billion to about $2 billion, within approximately $3 billion of total company advertising revenue. Total U.S. core advertising is nevertheless projected to decline about 1% in 2026 because linear-TV weakness offsets streaming and CTV gains. Recorded music is a smaller but positive theme: UBS expects penetration gains and price increases at digital service providers to drive mid- to high-single-digit annual recorded-music revenue growth through 2029, with AI applications representing an additional potential growth opportunity.

Analysis framework

UBS combines company disclosures, industry data and its own estimates to track subscriber additions, fiber passings, pricing, traffic, capex, capacity, viewership and advertising trends. It compares companies and technologies, develops multi-year operating scenarios, and uses valuation multiples such as EV/EBITDA, P/E, P/FCF and P/AFFO for covered equities and infrastructure assets.

Methodology notes

• Industry AnalysisSupply-demand framework

  Broadband, wireless, tower and data-center supply-demand analysis

  UBS links subscriber additions, fiber construction, spectrum, power constraints, leasing demand and capacity availability to competitive conditions and pricing.

• Industry AnalysisVolume-price decomposition

  Subscriber, penetration, ARPU and pricing analysis

  The report separates volume drivers such as FWA and fiber additions from price and ARPU trends to explain broadband and streaming revenue outcomes.

• Valuation methodsEV/EBITDA valuation

  Comparable-company multiple valuation

  UBS presents EV/EBITDA-based comparisons alongside P/E, P/FCF and P/AFFO metrics to compare covered companies and support price-target methodology.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AT&T (T)

  Broadband top pick and a major beneficiary of converged wireless-fiber offers and fiber expansion.

  Strengths

  Converged-account economics, aggressive acquisition-pricing capacity, Lumen fiber footprint and potential penetration upside.

  Comparison

  UBS expects AT&T and Verizon to capture about 75% of 2026 industry fiber additions.

  Risks

  FWA and fiber execution assumptions, competitive pricing and broadband-market disruption.

• Verizon (VZ)

  Major fiber builder and wireless-spectrum participant.

  Strengths

  Frontier-related fiber expansion and AWS-3 licenses from Auction 113.

  Weaknesses

  FWA growth is expected to slow in 2026 and beyond.

  Comparison

  Expected with AT&T to capture about 75% of 2026 fiber net additions.

  Risks

  Broadband competition and slower FWA growth.

• Comcast

  Cable operator exposed to broadband competition and linear-media headwinds.

  Weaknesses

  Subscriber declines and back-book repricing are expected to drive mid-single-digit revenue declines.

  Comparison

  Cable economics contrast with telco share gains in FWA and fiber.

  Risks

  Price compression, fiber overlap and declining linear-TV exposure.

• Charter

  Cable operator with relatively better EBITDA performance than peers.

  Strengths

  Video trends and wireless EBITDA partly offset high-speed-data challenges.

  Weaknesses

  Underlying high-speed-data pressure remains.

  Comparison

  UBS views Charter's EBITDA trend as better than cable peers despite broadband challenges.

  Risks

  Broadband subscriber losses and competition.

• Equinix / Digital Realty

  Data-center operators linked to constrained capacity and AI-related demand.

  Strengths

  Low primary-market vacancy, power constraints and pricing support.

  Comparison

  Third-party leasing demand varies across hyperscalers.

  Risks

  Power availability, timing of hyperscaler leasing and execution.

• American Tower / Crown Castle / SBA Communications

  Tower operators tied to carrier capex, leasing and spectrum deployment.

  Strengths

  Long-term MLAs and future densification support longer-term growth.

  Weaknesses

  Near-term capex lull and churn headwinds affect organic growth.

  Comparison

  Growth varies by contract structure and churn exposure.

  Risks

  Dish, Sprint and USM churn; delayed carrier capex.

Key data

• FWA subscribers25M+ in 2028 vs. ~16M at YE25UBS forecast; FWA is expected to continue taking more than 100% of industry broadband net adds.
• 2026 FWA net additions3.6M vs. 4.0M in 2025UBS estimate after a slowdown in the first half of 2026.
• 2026 fiber net additions~2.85M vs. ~2.48M in 2025AT&T and Verizon are expected to capture about 75% of industry fiber adds.
• Fiber passings9.1M in 2026 vs. 8.6M in 2025 and 8.2M in 2024UBS expects more than 10M annual passings in 2027.
• Data-center vacancy<2% in most primary marketsPower constraints and pre-leasing support scarcity and pricing.
• Hyperscale capex$1T+ in 2027UBS analyst estimate.
• Traditional TV viewership-12% in 2025Second-largest annual decline on record, according to the report.
• Total U.S. core advertising~1% decline in 2026Linear-TV weakness is expected to offset streaming and CTV growth.

Impact & implications

UBS's sector view favors technologies and businesses gaining share or benefiting from constrained infrastructure capacity—particularly fiber, FWA, data centers, selected towers and DTC platforms. It contrasts these with cable operators exposed to broadband price compression and media companies reliant on linear-TV advertising and affiliate revenue.

Risks

• Operational and financial leverage in pay-TV, telecom, wireless and broadband sectors.
• Potentially adverse regulatory rulings.
• Technology changes and increasing competition.
• Reliance on penetration of new services to grow cash flow.
• Potentially dilutive acquisitions and exposure to economic cycles.