Verizon (VZ) isn’t planning to adjust its investment in network infrastructure, even with recession fears looming.
“I think for the past 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 are going to do approximately $22 billion in capital expenditures, and that is our directive. And one part is our business as usual, and then the other is that the new spectrum that we bought last year is really coming in. Execution now, and we’re doing it as fast as we can.” .
In order to help offset the increase in capital expenditures as Verizon continues to invest heavily in its network infrastructure, the company has announced specific price increases this year, which vary across subscription plans.
These service fee adjustments have arrived as consumers continue to reconcile higher prices with inflation remaining near 40-year highs.
Verizon stock fell more than 4% Friday after the company reported a drop in subscribers. Vestberg noted that the drop in subscribers was expected after the price changes were introduced and maintained that they should be mitigated over time.
“We made a deliberate decision in the second quarter to do price adjustments in certain consumer segments. I think it was important for us to do that as well because our industry hasn’t adjusted prices on wireless at all, so this was the time to do that,” Vestberg said.
Verizon’s calculated decision to raise some fees for customers who know some subscribers may turn down higher rates isn’t unusual in the industry because telecom giants spend competing on levels of latency and network reliability.
On Thursday, AT&T chief financial officer Pascal Deroches told Yahoo Finance that the company plans to invest in its network. Desroches also expressed confidence in AT&T’s ability to continue spending on improving network speed and reliability in the event of an economic downturn.
Despite the current risks of a recession from the Federal Reserve, telecom services executives share expectations that their core product is resilient.
“We’ve all read what’s going on in the macro economy with high inflation and high interest rates, so it’s a bit mixed,” Vestberg said. “But obviously we’re in the core product. Everyone needs mobility, and everyone needs connectivity.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter Tweet embed.
Click here for the latest trending stock indices for Yahoo Finance
Click here for the latest stock market news and in-depth analysis, including events that move stocks
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for apple or Android
Follow Yahoo Finance on TwitterAnd the FacebookAnd the InstagramAnd the FlipboardAnd the LinkedInAnd the Youtube
#Verizon #CEO #peak #year #network #investment