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KT Corporation vs. AT&T: Which Telecom Stock Is the Better Pick?
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Key Takeaways
KT's AICT pivot includes AI partnerships with Microsoft and Palantir.
AT&T's mid-band spectrum buyout aims to cut 5G costs and accelerate Internet Air expansion.
KT faces heavy AI investment costs, while AT&T's wireline losses and debt weigh on results.
KT Corporation (KT - Free Report) and AT&T (T - Free Report) are large telecommunications providers with diverse services, including broadband, mobile and enterprise communications. Both are known for steady dividends. KT Corporation leads in South Korea, while AT&T dominates the U.S. market.
So, if an investor wants to gain exposure to the telecom sector, which of these two stocks offers the stronger investment case right now? Let us unpack.
The Case for KT Corporation
KT is rapidly shifting beyond its traditional telecom origins, embarking on a bold transformation into an AICT company and this forms the core of its next growth phase. As an AICT firm, KT combines IT and AI with its telecommunications capabilities to provide unique services and added value to customers. Under its AICT roadmap, KT is developing a comprehensive AI lineup anchored by its proprietary Mi:dm2.0 large language model (“LLM”). The model, launched in July, serves as the foundation for AI platform build projects for the enterprise and public sectors, with early contract wins from the Gyeonggi provincial government and Korea Water Resources Corporation.
For its AICT push, KT Corporation has also teamed up with Microsoft. It has integrated an AI agent, powered by Azure OpenAI-powered LLM, into Genie TV, boosting the AI use case. The company plans to introduce an AI model tailored for Korea, powered by ChatGPT for Omni and secure public cloud, in the second half of 2025. It also has a licensing partnership with Palantir. In the last reported quarter, AI IT business revenues increased 13.8% year over year, while revenues from KT Cloud were up 23%, driven by growing data center momentum and DBO project wins.
KT has consistently returned cash to shareholders through a stable dividend policy and opportunistic share repurchases. KT’s KRW 1 trillion share buyback plan — with KRW 250 billion completed in August 2025 and the remainder to be executed over the next three years — reflects strong confidence in future cash flow visibility. It has raised the dividend for the second quarter by 20% year over year to KRW 600 per share.
Nonetheless, KT’s ambitious push into AI demands significant upfront capital investment. Management has committed KRW 1 trillion over five years for cybersecurity. These capital-intensive initiatives may pressure near-term profitability as AI and cloud operations scale up. Moreover, the AI pivot entails execution risk. Competition from SK Telecom and LG Uplus could intensify as each invests aggressively in an AI-first strategy.
Moreover, headwinds from a heavily penetrated domestic telecom market offer limited scope for organic expansion. Stiff competition from SK Telecom and LG Uplus could erode average revenue per user and margins. Additionally, while second-quarter operating profit was impressive (up 105.4% to KRW 1,014.8 billion), a portion stemmed from one-off real estate gains. This raises questions about profit sustainability in upcoming quarters.
The Case for AT&T
Based in Dallas, TX, AT&T is one of the largest wireless service providers in North America and one of the world’s leading communications service carriers. AT&T is primarily focusing on core wireless businesses as it expands 5G and fiber coverage across the country. The company’s 5G policy framework hinges on three pillars — mobile 5G, fixed wireless and edge computing.
AT&T’s pending acquisition of mid-band spectrum from EchoStar (3.45 GHz) is a key part of the 5G strategy, as it will enhance 5G wireless performance cost-effectively. The acquisition eliminates the need for the construction of additional cell sites for network capacity expansion. This will lower the capital investment requirements and drive operational efficiency in the long term. The buyout will also enable faster expansion of Internet Air (5G fixed wireless). AT&T reported 270,000 Internet Air net adds (doubling year over year) and more than 550,000 total new subscribers to advanced broadband services (Fiber + Internet Air).
Increasing fiber scale offers a long runway for broadband monetization. AT&T had more than 31 million total locations with fiber at third-quarter-end and anticipates reaching more than 60 million customer locations by 2030. The company added 288,000 AT&T Fiber customers and reached more than 10 million premium AT&T Fiber subscribers. AT&T expects acquisitions of fiber assets from Lumen to boost organic growth. The company aims to deploy Open RAN for 70% of its wireless network traffic across open-capable platforms by late 2026.
Strong cash flow generation buoys shareholder returns. AT&T generated $4.9 billion of free cash flow in the third quarter of 2025. The company returned $3.5 billion to its shareholders, including $1.5 billion in repurchases, and is on track to execute $4 billion of buybacks for the year. Management reiterated that full-year free cash flow is expected to be in the low to mid-$16 billion range.
However, the wireline division is struggling with persistent losses in access lines due to competitive pressures. Revenues from Business Wireline were down 7.8% year over year in the third quarter to $4.25 billion, due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. Healthy discounts and freebies to woo customers dent margins. The high debt burden remains a concern. As of Sept. 30, 2025, AT&T had $20.27 billion of cash and cash equivalents with long-term debt of $128.09 billion.
Share Performance for KT & T
Image Source: Zacks Investment Research
Over the past month, KT and T have declined 1.9% and 9%, respectively.
Valuation for KT & T
Image Source: Zacks Investment Research
In terms of price/book ratio, KT’s shares are trading at 0.75X, lower than T’s 1.45X.
How Do the Consensus Estimates Compare for KT & T?
Analysts have revised their earnings estimates downward for KT for the current year.
Image Source: Zacks Investment Research
For T, analysts have kept their estimates unchanged.
Image Source: Zacks Investment Research
KT or T: Which Is a Smarter Pick?
AT&T carries a Zacks Rank #3 (Hold) while KT Corporation carries #4 (Sell) at present.
Consequently, in terms of Zacks Rank, AT&T seems to be a better pick at the moment.
Image: Bigstock
KT Corporation vs. AT&T: Which Telecom Stock Is the Better Pick?
Key Takeaways
KT Corporation (KT - Free Report) and AT&T (T - Free Report) are large telecommunications providers with diverse services, including broadband, mobile and enterprise communications. Both are known for steady dividends. KT Corporation leads in South Korea, while AT&T dominates the U.S. market.
So, if an investor wants to gain exposure to the telecom sector, which of these two stocks offers the stronger investment case right now? Let us unpack.
The Case for KT Corporation
KT is rapidly shifting beyond its traditional telecom origins, embarking on a bold transformation into an AICT company and this forms the core of its next growth phase. As an AICT firm, KT combines IT and AI with its telecommunications capabilities to provide unique services and added value to customers. Under its AICT roadmap, KT is developing a comprehensive AI lineup anchored by its proprietary Mi:dm2.0 large language model (“LLM”). The model, launched in July, serves as the foundation for AI platform build projects for the enterprise and public sectors, with early contract wins from the Gyeonggi provincial government and Korea Water Resources Corporation.
For its AICT push, KT Corporation has also teamed up with Microsoft. It has integrated an AI agent, powered by Azure OpenAI-powered LLM, into Genie TV, boosting the AI use case. The company plans to introduce an AI model tailored for Korea, powered by ChatGPT for Omni and secure public cloud, in the second half of 2025. It also has a licensing partnership with Palantir. In the last reported quarter, AI IT business revenues increased 13.8% year over year, while revenues from KT Cloud were up 23%, driven by growing data center momentum and DBO project wins.
KT has consistently returned cash to shareholders through a stable dividend policy and opportunistic share repurchases. KT’s KRW 1 trillion share buyback plan — with KRW 250 billion completed in August 2025 and the remainder to be executed over the next three years — reflects strong confidence in future cash flow visibility. It has raised the dividend for the second quarter by 20% year over year to KRW 600 per share.
Nonetheless, KT’s ambitious push into AI demands significant upfront capital investment. Management has committed KRW 1 trillion over five years for cybersecurity. These capital-intensive initiatives may pressure near-term profitability as AI and cloud operations scale up. Moreover, the AI pivot entails execution risk. Competition from SK Telecom and LG Uplus could intensify as each invests aggressively in an AI-first strategy.
Moreover, headwinds from a heavily penetrated domestic telecom market offer limited scope for organic expansion. Stiff competition from SK Telecom and LG Uplus could erode average revenue per user and margins. Additionally, while second-quarter operating profit was impressive (up 105.4% to KRW 1,014.8 billion), a portion stemmed from one-off real estate gains. This raises questions about profit sustainability in upcoming quarters.
The Case for AT&T
Based in Dallas, TX, AT&T is one of the largest wireless service providers in North America and one of the world’s leading communications service carriers. AT&T is primarily focusing on core wireless businesses as it expands 5G and fiber coverage across the country. The company’s 5G policy framework hinges on three pillars — mobile 5G, fixed wireless and edge computing.
AT&T’s pending acquisition of mid-band spectrum from EchoStar (3.45 GHz) is a key part of the 5G strategy, as it will enhance 5G wireless performance cost-effectively. The acquisition eliminates the need for the construction of additional cell sites for network capacity expansion. This will lower the capital investment requirements and drive operational efficiency in the long term. The buyout will also enable faster expansion of Internet Air (5G fixed wireless). AT&T reported 270,000 Internet Air net adds (doubling year over year) and more than 550,000 total new subscribers to advanced broadband services (Fiber + Internet Air).
Increasing fiber scale offers a long runway for broadband monetization. AT&T had more than 31 million total locations with fiber at third-quarter-end and anticipates reaching more than 60 million customer locations by 2030. The company added 288,000 AT&T Fiber customers and reached more than 10 million premium AT&T Fiber subscribers. AT&T expects acquisitions of fiber assets from Lumen to boost organic growth. The company aims to deploy Open RAN for 70% of its wireless network traffic across open-capable platforms by late 2026.
Strong cash flow generation buoys shareholder returns. AT&T generated $4.9 billion of free cash flow in the third quarter of 2025. The company returned $3.5 billion to its shareholders, including $1.5 billion in repurchases, and is on track to execute $4 billion of buybacks for the year. Management reiterated that full-year free cash flow is expected to be in the low to mid-$16 billion range.
However, the wireline division is struggling with persistent losses in access lines due to competitive pressures. Revenues from Business Wireline were down 7.8% year over year in the third quarter to $4.25 billion, due to lower demand for legacy voice and data services as customers shifted to more advanced IP-based offerings. Healthy discounts and freebies to woo customers dent margins. The high debt burden remains a concern. As of Sept. 30, 2025, AT&T had $20.27 billion of cash and cash equivalents with long-term debt of $128.09 billion.
Share Performance for KT & T
Image Source: Zacks Investment Research
Over the past month, KT and T have declined 1.9% and 9%, respectively.
Valuation for KT & T
Image Source: Zacks Investment Research
In terms of price/book ratio, KT’s shares are trading at 0.75X, lower than T’s 1.45X.
How Do the Consensus Estimates Compare for KT & T?
Analysts have revised their earnings estimates downward for KT for the current year.
Image Source: Zacks Investment Research
For T, analysts have kept their estimates unchanged.
Image Source: Zacks Investment Research
KT or T: Which Is a Smarter Pick?
AT&T carries a Zacks Rank #3 (Hold) while KT Corporation carries #4 (Sell) at present.
Consequently, in terms of Zacks Rank, AT&T seems to be a better pick at the moment.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.