T-Mobile is set to raise prices on some of its older plans, marking the first such increase in nearly a decade, according to a memo sent to employees and obtained by CNET. The company will begin sending out notifications on Wednesday to affected customers, who will see the price hikes reflected in their June or July bills.
Jon Freier, president of T-Mobile's consumer group, stated in the memo that the decision to raise prices on older plans is designed to "keep up with rising inflation and costs." However, customers on the carrier's latest Go5G plans and those covered by T-Mobile's Price Lock guarantee will not be subject to the increase.
While the exact number of affected customers is unknown, the memo describes it as a "small portion" of T-Mobile's customer base. Those with free lines from the carrier will not see increases on those specific lines, as confirmed by T-Mobile to CNET.
The company expects to notify all affected customers on Wednesday, but unlike last year's attempted migration of customers from older, cheaper plans to newer, pricier ones, opting out of the rate hike will not be an option. Affected customers will be able to call T-Mobile to change their plans to newer offerings, but they won't be able to avoid the increase altogether.
The announcement of the price hike comes amid increasing indications from T-Mobile that it was looking to raise prices. Last week, at the MoffettNathanson Media and Communications Conference, T-Mobile's Chief Financial Officer Peter Osvaldik hinted at an impending increase without disclosing any details.
The rise in prices comes after T-Mobile's merger with Sprint, which was completed in 2020. As part of the merger, T-Mobile was legally required to not raise prices for three years, a period that ended last year. Since then, the carrier has introduced its Go5G assortment of plans, which offer new features but come at a higher price compared to T-Mobile's earlier offerings.
A recent report by Finland-based research firm Rewheel found that since the T-Mobile/Sprint merger, the US wireless market has become "one of the most expensive mobile markets in the world."
While this is the first price hike from T-Mobile in nearly a decade, its rivals, AT&T and Verizon, have already implemented multiple increases to their respective plans over the last couple of years. These moves appear to be designed to push customers to switch to newer, more expensive wireless plans.
As T-Mobile moves forward with its price increase, affected customers will have to decide whether to absorb the higher costs or explore alternative plans within the company's offerings. The impact of this decision on customer retention and satisfaction remains to be seen, especially in light of the increasingly competitive and expensive US wireless market.
