AT&T’s subscriber growth shows inflation isn’t slowing cell phone demand
AT&T's results will ease investor concerns that consumers are pulling back on wireless spending in the face of decades-high inflation.Dallas-based AT&T Inc. exceeded analysts’ estimates for profit and wireless subscriber growth, suggesting that mobile-service providers remain insulated from tighter consumer budgets.
The company said it’s ahead of schedule on wireless upgrades in part due to “record levels” of spending on 5G and fiber-network build-outs in the first three quarters of the year. Looking ahead, the company says it expects spending to taper down by more than $2 billion in the fourth quarter. Investors became concerned about the company’s ability to pay its $8 billion dividend and hold to debt-reduction promises earlier this year when it lowered its free cash flow forecast from $16 billion, in part due to late customer payments.The No. 3 U.S. wireless carrier added 964,000 subscribers in the third quarter, topping analyst estimates of 913,000. That included 708,000 regular monthly phone customers, ahead of the 631,000 average projection.
The results will ease investor concerns that consumers are pulling back on wireless spending in the face of decades-high inflation. Demand has held up despite AT&T’s recent $6 price increase on older plans.
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