Telcos Face Challenges from COVID-19 Downturn, S&P Warns

U.S. telcos could take a hit from COVID-19, S&P Global reported Wednesday. Telcos have “historically been quite resistant to macroeconomic contractions,” but risks remain, the debt ratings firm said. The pandemic forced wireless carriers to close stores, “which will reduce gross postpaid subscriber additions and upgrade rates, but also lower churn,” S&P said: “Supply chain impacts could also result in lower equipment revenue for the carriers, but bolster profitability.” Wireline faces more affects, “especially among companies with greater exposure to small and midsize businesses (SMBs),” S&P said: “In a recession, we would expect many SMB customers to close locations and even go out of business.”