News of AT&T’s wireless price hike stole headlines this week, but the operator also quietly unveiled a price increase for certain fixed broadband subscribers.
In a notice posted to its customer support website, AT&T said monthly rates for AT&T Internet customers are going up $3 per month. The document is dated May 2, 2022. The jump is half the $6 price increase AT&T just implemented for customers on some of its older wireless plans.
An AT&T representative told Fierce its nearly 6.3 million fiber customers won’t be impacted by the change. “Like others in the industry, we adjust prices and fees to address costs and the demands of the business,” the representative stated.
Recon Analytics founder Roger Entner explained to Fierce AT&T Internet (formerly known as U-verse) is one of four broadband products the operator offers, the others being fiber, fixed wireless access and legacy DSL. He described it as essentially a “fiber to the curb” service. According to its website, speeds for AT&T Internet plans range from 25 Mbps to 100 Mbps. As of the end of Q1 2022, AT&T had nearly 7.6 million non-fiber internet customers, thought it did not provide a breakdown of how many were AT&T Internet versus DSL or fixed wireless.
The bump follows a $2 per month price increase for DSL customers announced in January. AT&T also raised rates for lower-tier fiber customers the same month when it introduced its 2-gig and 5-gig plans and rolled out a new flat pricing structure. As PCMag reported at the time, the cost of its 300 Mbps, 500 Mbps and 1-gig plans jumped $20 each as a result.
Entner said AT&T could lose “not a lot, but some” customers as a result of its latest move. He explained price hikes are more common in the broadband world than in wireless and while more options are entering the market there are still fewer available than in the mobile arena. Indeed, New Street Research recently observed “the majority of the broadband market remains a duopoly with pricing power.” Entner added it’s “so much easier” to switch wireless providers, meaning AT&T’s mobile move will likely have more of an impact.
Still, Entner noted price hikes in broadband generally could be good for fixed wireless access providers – at least on the lower end of the market. While fiber beats cable and cable beats DSL, fixed wireless wins against slower speed services like DSL and among disgruntled cable customers, he said.
But cost isn’t the only factor influencing broadband decisions. Entner said pricing aside, the next most important priorities are data speed and reliability.
AT&T CEO John Stankey hinted at the coming rate increase on a recent earnings call, stating the operator was considering price hikes to counter rising costs from inflation. Verizon CEO Hans Vestberg made similar comments, though it was unclear if he was speaking specifically about wireless or about fixed as well. Meanwhile, Comcast executives said thus far it has been able to more than offset the impacts of inflation through continued efforts to boost operational efficiencies.
Charter Communications didn’t shed much light on its pricing plans, but New Street Research noted in an investor report that executives “haven’t said they won’t” raise rates. Analysts at MoffettNathanson added “Their broadband prices are already lower than peers’, leaving them more room for faster future ARPU growth rates.”