Verizon (VZ) does not plan to moderate its investment in network infrastructure, even as recession concerns loom.
“I think over the last six or seven years we’ve mapped out 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 capex, that’s our guidance. And one part is our business as usual, and the other part is that the new spectrum that we bought last year in It’s actually coming to execution 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 plans.
These utility rate adjustments came as consumers continue to juggle higher prices with inflation hovering near 40-year highs.
Verizon shares fell more than 4% on Friday after the company reported a decline in subscribers. Vestberg said the drop in subscribers after the price changes were implemented was expected and said it should decrease over time.
“We made a deliberate decision in the second quarter to make a price adjustment in certain consumer segments,” Vestberg said. time to do it.”
Verizon’s calculated decision to raise some rates for customers knowing that some subscribers might balk at higher prices is not unusual in the industry as telecom giants spend to compete on latency levels and network reliability. .
On Thursday, AT&T CFO 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 to invest in improving network speed and reliability in the event of an economic downturn.
Despite the current risk of a Federal Reserve-induced recession, communication services executives share the expectation that their core product will be resilient.
“We all read what’s going on in the macroeconomy with inflation higher and interest rates going up, so it’s a bit of a mixed bag,” Vestberg said. “But clearly, we’re on the bottom line. Everybody needs mobility, everybody needs to be connected.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.
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