AT&T’s CEO mentioned on the company’s recent earnings call that it may raise prices on some of its plans, and today, AT&T has done just that.
It’s raising prices on some older wireless plans by up to $6 a month for single-line customers and up to $12 per month for families.
Subscribers may avoid the price hike on their older plans by switching to new unlimited plans.
“We are encouraging our customers to explore our newer plans, which offer many additional features, more flexibility for each line on their account and, in many cases, a lower monthly cost,” said AT&T in an email to Fierce Wireless. “This change only affects a portion of wireless customers. Customers on our newer plans are not seeing any changes at this time.”
Speaking on AT&T’s first quarter 2022 earnings call, AT&T CEO John Stankey said inflation and rising wages had added at least $1 billion to the company’s overall costs. He said, “I’m not happy about the fact that wages are rising as fast as they are.” He added that AT&T would consider price increases if necessary. “We’ll be very smart and judicious as we have to apply it,” he said on April 21.
AT&T said it has not raised prices on the affected plans for three years.
In fact, the carrier, like its competitors, has mainly been attracting new subscribers and higher revenues through the use of promotions and incentives to move people to higher-priced plans.
Recon Analytics analyst Roger Entner saw the writing on the wall a couple of weeks ago and ran a survey to gauge consumers’ reactions to possible price increases on their mobile plans.
The Recon Analytics Mobile Intender survey ran on April 18 and April 25 and included about 1,500 respondents. AT&T customers were asked how they would feel about a $6 per line/$12 per family price increase. About 25.7% said they would pay the increase. That left about 74.3% who would seek other options, including switching to a lower-priced plan at AT&T or going to another provider altogether.
Recon Analytics determined that churn at AT&T could increase from its current 1.1% per quarter to 1.25% per quarter.
Of those consumers who churn, the majority of them would likely go to Verizon, “which is like a rescue ring right at a time when things are not going that well in Basking Ridge,” said Entner. “This is a gift for Manon Brouillette”
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Brouillette took over the job as CEO of Verizon Consumer Group in January this year.