AT&T CFO Warns of “Hotter” Than Expected Inflation Pressures, Potential Price Increases

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AT&T CFO Pascal Desroches said Tuesday that inflation is the issue he is most concerned about, and one that he expects to continue “for the foreseeable future.” 

“It’s hard for me to envision that that’s not going to impact the consumer negatively,” Desroches said. “And that we and some others will see some pressure.” 

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AT&T has already raised prices on some mobile service plans in order to combat the impacts of inflation. And speaking at the Credit Suisse Communications Conference, Desroches said the company may review its pricing again. AT&T is seeing the impacts of inflation across labor, supplies, energy and transport. 

“We built in a healthy level of inflationary expectations into our budget,” Desroches said. “With that said, it’s running hotter than we thought.” 

Thus far, the consumer has been “pretty resilient,” thanks in part to the stimulus checks given out early in the pandemic. However, Desroches said the company has seen an increase in involuntary churn, now coming in at pre-pandemic levels. 

The telecommunications company recently eliminated HBO Max as a free perk from its premium unlimited wireless plan. The change impacts new customers, as existing users who were already signed up for the plan will continue to receive HBO Max. AT&T previously owned WarnerMedia, and HBO Max, but recently spun off the company in a merger with Discovery. 

Asked about the decision, Desroches said it had nothing to do with HBO Max as a service, saying AT&T believes it will be “an incredibly successful company.” Rather, Desroches said the company is experimenting with adding other free features, such as hotspot data, to bring in more customers. 

“It’s really not anything against HBO Max,” Desroches said. “It’s us trying to drive deeper penetration to different portions of our customer base.”

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