Executives from AT&T and Verizon reassured investors they have not yet registered material financial impacts from supply chain issues caused by the spread of Covid-19 (coronavirus), but acknowledged continued production delays could eventually dent equipment revenue.
Speaking at an investor conference, Verizon CFO Matt Ellis said the virus is not expected to weigh heavily on the operator’s Q1 results, but warned a noticeable impact could be felt in future if handset production delays continue.
Even so, he insisted equipment revenue “doesn’t really impact the earnings profile as significantly for us given that’s not where most of the earnings come from. The earnings come from the service revenue”.
He added the operator is monitoring the viruses’ potential impact on consumer behaviour, but doesn’t yet have enough data to tell whether there’s been any change.
Verizon is yet to notice an impact on availability of network equipment, Ellis said.
AT&T COO John Stankey also predicted little immediate financial impact due to constraints on the supply of handsets, smartwatches and tablets, especially from vendors with operations in China.
He pointed to an investor update issued by Foxconn, one of Apple’s biggest manufacturing partners, noting it expects to return to full production by the end of March.
If that happens, Stankey said AT&T anticipates “all the tactics we’ve used to stockpile and allocate those types of things should be able to get us through with some reasonable confidence”. –Mobile World Live