AT&T exec says 'it's only a matter of time' before people 'really' feel inflation

AT&T Chief Financial Officer Pascal Desroches says "it's only a matter of time" before consumers start to "really" feel the impact of inflation, but he thinks the wireless business will prove "resilient." In the wake of a recent Federal Reserve report that showed jumps in debt not witnessed in years, Desroches sees signs that "the consumer is starting to feel the pinch and that [at] these higher interest-rate levels, credit card debt will be very expensive to maintain." Desroches continued, saying, "So, all those things cause me to be somewhat cautious. But candidly, when I think about where we are as an industry and as a company, the last thing a consumer is going to turn off is their wireless relationship," he added. Speaking about wireless access, he said that people "need it to live" and "need it to work." Still, AT&T has seen some impacts to its business from the current economic situation. Desroches has noticed an "uptick in delinquencies" that's "slightly worse than pre-pandemic levels." That's not necessarily an "alarming" sign, he noted, but rather "something we have to keep a close eye on as we look out the next several quarters." While some analysts have wondered how long companies on the whole would be able to keep up subscriber growth that's significantly in excess of population growth, he pointed to several positive dynamics, including that kids are getting phones at younger ages, seniors seem to be embracing technology more due to the pandemic, and recently formed small businesses can give workers a second wireless connection. AT&T specifically has benefited in the past few years from offers aimed at current customers as well as potential switchers. "We wanted to make sure we kept our existing customers because our churn was higher historically than others," he said.