Consumers Keeping Up With Cellphone Bills Despite Economic Strains

On Wednesday, AT&T finance chief

Pascal Desroches

said payment delinquencies were unusually low during late 2020 and 2021 but they normalized in 2022 to be “slightly worse” than prepandemic levels.  

“But nothing that I would say that is alarming,” he said at a

Citigroup

conference. “It is really more of a normalization of what had been an unusually buoyant economic environment.”

Verizon Chief Executive

Hans Vestberg

said the company is also watching closely for changes in consumer behavior. “So far, we haven’t seen any impact of late payments or anything like that,” he said at the same

Citi

conference. 

Analysts have been watching late bill payments as a gauge of how inflation might be affecting household budgets and as an early warning sign of whether consumers would churn from current services. The companies are expected to release their quarterly earnings reports in the next few weeks.

Wireless carriers have been bracing for a slower growth environment after adding customers at a breakneck pace in earlier years of the Covid-19 pandemic. While the industry remains healthy, Mr. Desroches said, he expects net customer additions to come at a more modest pace this year. “I think what you should look for is an environment where there is competition, but it’s going to be done so in a very disciplined way,” Mr. Desroches said. 

One pocket of competition for wireless carriers in recent months has come from cable companies that have promoted new and cheaper cellphone plans. Some customers have also traded down to a prepaid phone plan from pricier options to cut back on expenses. 

To help keep those customers, Verizon has been growing its presence in prepaid in recent years, acquiring a collection of brands in its 2021 acquisition of TracFone Wireless and launching Total by Verizon last fall. “We can play with anyone and meet the needs of any consumer in the market,” Mr. Vestberg said Wednesday. 

T-Mobile, traditionally the lower cost national wireless carrier, isn’t seeing its customers come under pressure to pay bills or trading down on services, even as cancellations return to more historic levels, said Financial Chief

Peter Osvaldik.

“We aren’t seeing anything in regard to rate plan migrations,” he said, noting that the company looks at customer payment behavior daily. “A return to that prepandemic level but nothing worse.”

Write to Thomas Gryta at [email protected]