The telecom giant is increasing the prices of its grandfathered cell phone plans by 5 percent this year, according to a filing with the Securities and Exchange Commission. The hikes are effective Nov. 1. The increases come as AT&T tries to attract customers who have already upgraded to newer, more expensive plans or who may have decided not to renew their contracts because of the high cost of service. “We continue to believe that our customers should be able to affordably maintain their service and continue using it for essential communications needs,” said spokeswoman Kaitlyn Tomlinson in a statement. “These price hikes are necessary in order to ensure that all our customers can have access to the best possible service.”
Mobile carriers like AT&T and Verizon rarely raise prices on existing phone plans, but it does happen from time to time. AT&T is now raising the monthly cost on select legacy plans, in an effort to push people to newer services.
Bloomberg first reported on Tuesday that AT&T is raising prices on select older plans by up to $6 per month for single-line customers, and up to $12 per month for families. AT&T isn’t saying exactly which plans are affected, except that they include older Unlimited and Mobile Share plans. Subscribers can check what type of plan they are on by visiting the AT&T account portal, and anyone affected by the change will receive an email notification.
It’s unusual for pricing on phone plans to change after they are introduced — instead, carriers typically introduce new plans periodically with more features and similar (or lower) pricing. Reception to the new pricing seems to be mixed, with one customer saying on Reddit, “upgrading my two Mobile Share lines takes me from $93.95 a month to $130.00 a month (both before fees). Even with HBO Max thrown in ($15 a month value) and the $12 increase, that’s still $9 higher, effectively.” Another person in the same thread wrote, “it’s still cheaper for me than to switch to unlimited, but this may cause me to want to go to T-Mobile.” AT&T’s current unlimited plans start at $65 per month for one line, or $35 per line per month with four lines.
The move is likely one of several strategies from AT&T to boost profits in the current inflation-heavy U.S. market. However, it’s also happening at a time when there are more options for unlimited cellular data than ever. Google Fi, a carrier that uses T-Mobile and U.S. Cellular’s networks, just dropped prices on its unlimited plans. According to leaked employee documentation from The T-Mo Report, T-Mobile is rolling out new incentives for porting in customers with lines on other networks, including 20% off voice service for as long as someone remains a T-Mobile customer. The new policy was allegedly put into place before AT&T’s announcement, so it’s probably not related, but it could lead to T-Mobile capitalizing on the price hikes.
This is also happening shortly after AT&T sold its WarnerMedia subsidiary to Discovery, which merged to become Warner Bros. Discovery. AT&T also finished spinning off DirecTV into its own entity last year, leaving wireless service as the company’s main revenue source — another possible reason for the price hikes.
Source: Bloomberg, The Verge
