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Reports surfaced earlier this week that a price hike could be coming
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T-Mobile confirmed it’s raising rates by as much as $5/line per month on some accounts
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T-Mobile blamed rising costs and inflation for “small adjustments” to some of its oldest rate plan prices
So much for T-Mobile trying to be the Goody Two-Shoes of wireless carriers.
The Bellevue, Washington-based company confirmed on Wednesday that it’s jacking up prices for some of its oldest rate plans, a move that follows price increases at rivals AT&T and Verizon.
For customers who received a text message on May 22 regarding rate changes, T-Mobile said on its website that beginning June 5, the rate on certain voice plans will increase by $5/line per month and the rate for connected device plans will increase by $2/line per month.
The company blamed the increase on rising costs and inflation.
"If you received a notification from us, your rate plan price is undergoing an adjustment,” T-Mobile told customers.
Some folks saw this coming. Earlier this week, The Mobile Report speculated that legacy plans for existing customers were getting a price increase, a theory it pointed out was bolstered by statements made by T-Mobile CFO Peter Osvaldik at the MoffettNathanson investor conference last week.
Osvaldik was asked about the expectation for ARPU growth this year and explained there are “a number of factors” to that. ARPU refers to the amount of revenue each user generates on average.
The key word here appears to be “optimization.”
“There are some, call it price actions in terms of rate plan optimization that we highlighted we will be making. Those will have more of a second half of the year impact,” Osvaldik said at the conference, according to a Seeking Alpha transcript.
That’s expected to have some impact on churn as well – as some people will decide to switch – but he also noted that they see “continual great uptake” in terms of the top-tier Go5G Plus and Go5G Next rate plans that drive up ARPU.
Interestingly, T-Mobile’s FAQ site says: “Yes, you’re welcome to switch your plan at any time,” by which we’re pretty sure they want to get customers to switch to a higher-end plan, as wireless carriers are fairly well adept at getting people into their stores and then upselling them to the more costly plans. But we’re just speculating.
It’s not entirely clear exactly which plans are in for the increases. Today, The Mobile Report said customers on Simple Choice and ONE plans will see the increase, as well as potentially older/other plans. It also said that plans as new as Magenta are impacted.
T-Mobile told Fierce that it’s not sharing details about which plans are affected but it’s notifying customers today who are impacted. And for the record: “We aren’t asking them to move to different plans, but they are welcome to,” the spokesperson said.