Wireless Price Hikes Fatten Profits for Phone Carriers With Few Risks

Millions of wireless customers are opening recent phone bills to find AT&T and Verizon raised rates on older service plans. Both Verizon, and to a lesser degree T-Mobile US Inc, have also increased monthly fees. While customers aren’t happy about it, they’re not racing for the exits. And that could pay off for the carriers. “[Telecom companies] want to use this inflationary period to reset their pricing models upward,” said Tammy Parker, an analyst with GlobalData. “So far however, many subscribers are sticking with what they have, even if that means paying more than they used to.” It took a pandemic, kinks in the global supply chain, skyrocketing inflation and the elimination of a fourth competitor, Sprint, but the tables have finally turned for the wireless industry. After years of price battles to attract and keep customers, including phone giveaways and perks like free video streaming, carriers are, for the moment, in a position to take away those treats and raise rates without any immediate backlash. AT&T and Verizon are scheduled to report earnings, and while the price increases didn’t go into effect until the last weeks of the quarter, the results may show slight benefits in the form of a boost to revenue and margins.