AT&T, Verizon Struggling to Keep Up With Effects of Inflation: Moffett
AT&T and Verizon are raising monthly fees for some subscribers, but both will be hard-pressed to keep up with the effects of inflation, MoffettNathanson’s Craig Moffett told investors Friday. “By Verizon’s own estimate, about a quarter of their total costs…
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are inflation-sensitive,” Moffett said. “Assuming that those ~$21B of annual costs are rising by something like 5%, their total cost base will rise by ~$1B a year, offsetting all of the [average revenue per user] increase.” AT&T’s situation is similar, he said: “Yes, they will see higher revenue, but their costs, too, are rising more than fast enough to offset the benefit.” Promotions are also costing both, Moffett said. “To stem share losses in their Consumer Wireless segment, Verizon has increased promotional discounts for phones to as much as $800 for some trade-in devices for both new and existing premium unlimited customers,” he said.