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AT&T's price increase could send customers to Verizon

AT&T plans to raise prices on some of its older pricing plans. According to one recent study, the move could send tens of thousands of AT&T customers fleeing to Verizon.

"We are adjusting prices on some of our older wireless plans, which have not seen an increase in three years," AT&T's Jim Greer confirmed in an email to Light Reading. "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."

Greer did not respond to follow-up questions, including which plans would be affected. However, the Wall Street Journal reported that the price hikes would affect AT&T's older "Unlimited" and "Mobile Share" plans, increasing prices by $6 to $12 per month, depending on how many lines of service a customer has. The change will go into effect starting June 1.

(Source: Robert K. Chin - Storefronts/Alamy Stock Photo)
(Source: Robert K. Chin - Storefronts/Alamy Stock Photo)

AT&T's move comes just weeks after the company's CEO hinted that the operator could raise prices due to inflation. "We are seeing inflationary pressures," John Stankey said last month during AT&T's quarterly conference call. Stankey suggested that AT&T may pass on those pressures to its customers through price increases. "Our history would suggest that we know how to do that, and we can do that."

However, new findings from telecom research and analysis firm Recon Analytics indicate that AT&T is positioned to lose as many as half a million customers due to the price hike. The firm predicted that many of those customers would switch to Verizon.

"Just when Verizon is struggling, this is a helping hand from Dallas," Recon Analytics analyst Roger Entner told Light Reading. Verizon recently reported sluggish quarterly customer figures, and AT&T is based in Dallas.

Entner estimated that a large portion of AT&T's customer base, likely tens of millions of people, would be affected by the price hike.

Recon Analytics conducts regular surveys of mobile customers, called the Recon Analytics Mobile Intender Survey. After AT&T's CEO first suggested that the operator might hike prices, the firm asked survey respondents what they would do if the operator actually did raise prices. According to the firm's April 15 survey results, 180,000 to 450,000 AT&T customers would likely seek another service provider, and a sizable chunk would likely select Verizon.

"This affects a lot of people," Entner said.

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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