Verizon (VZ) does not plan to moderate its investment in network infrastructure even as recession fears loom.
“I think for the last six or seven years we’ve been planning exactly how we’re going to invest in the network,” Verizon CEO Hans Vestberg told Yahoo Finance Live (video above). “This is our peak year. We’re going to do about $22 billion in investments, that’s our forecast. And part of it is our regular business, and part of it is just the new spectrum that we bought the last year is actually coming to fruition right now, and we’re doing it as fast as we can.”
To help offset increased capital expenditures as Verizon continues to invest heavily in its network infrastructure, the company announced select price increases this year, which vary by subscription plan.
These service charge adjustments came as consumers continue to juggle higher prices with inflation that remains near 40-year highs.
Verizon stock fell more than 4% on Friday after the company reported a drop in subscriber numbers. Vestberg noted that the decline in subscribers was expected after the price changes were rolled out and argued that it should ease over time.
“We made a conscious decision in the second quarter to make price adjustments in certain consumer segments,” Vestberg said. time to do it.”
Verizon’s calculated decision to raise some fees for customers knowing some subscribers might balk at higher prices isn’t unusual in the industry, as telecom giants spend to compete on latency levels and reliability. of the network.
On Thursday, AT&T Chief Financial Officer Pascal Desroches told Yahoo Finance that the company plans to invest in its network. Desroches also expressed confidence in AT&T’s ability to continue spending to improve network speed and reliability in the face of an economic downturn.
Despite the current risk of a Federal Reserve-induced recession, communications services executives share the expectation that their commodity is resilient.
“We’ve all read what’s happening in the macro economy with higher inflation and rising interest rates, so it’s a bit of a mixed bag,” Vestberg said. “But clearly we’re in the fundamental product. Everyone needs mobility, everyone needs to be connected.”
Brad Smith is a Presenter at Yahoo Finance. Follow him on Twitter @thebradsmith.
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