Verizon (vz) has no plans to moderate its investments in network infrastructure, even as recession worries loom.
“I think we’ve been planning exactly how we’re going to invest in the network for the last six, seven years,” Verizon CEO Hans Vestberg told Yahoo Finance Live (video above). “This is our peak year. We’re going to have about $22 billion in investments, that’s our forecast. And one part is our normal business, and the other is that the new spectrum that we bought last year is actually reaching execution now, and we’re doing that as fast as we can.”
To offset the increase in capital expenditures as Verizon continues to invest heavily in its network infrastructure, the company announced select price increases this year that vary by subscription plan.
These service fee adjustments were made as consumers continue to juggle higher prices as inflation lingers near 40-year highs.
Verizon shares fell more than 4% on Friday after the company reported a drop in subscriber count. Vestberg pointed out that the drop in subscribers was expected after the price changes were implemented, and claimed 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. “I think it was important for us to do that as our industry has never priced wireless, so this was the time.”
Verizon’s calculated decision to increase some fees for customers, knowing some subscribers might shy away from higher prices, is not uncommon in the industry as telecom giants spend money to compete over latency and network reliability.
On Thursday, Pascal Desroches, AT&T’s chief financial officer said Yahoo Finance that the company plans to invest in its network. Desroches also expressed confidence in AT&T’s ability to continue investing in improving network speed and reliability in the event of an economic downturn.
Despite the current risk of a Fed-induced recession, communications services executives share the expectation that their core product will be resilient.
“We all read what’s happening in macroeconomics with higher inflation and interest rates, so it’s a bit mixed,” Vestberg said. “But we are clearly in the basic product. Everyone needs mobility, everyone needs to be connected.”
Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.