Grandfathered AT&T customers get a price hike, but not for the reason AT&T claims

• A single line on a legacy plan will see its price rise by $10 a month.
• Accounts with multiple lines on a legacy plan will see the overall price rise by $20 per month. This is not a $20 per line price hike each month.

AT&T’s support page explains why it hiked the legacy plan rates, but we know the real reason

On the support page, AT&T explains why it is raising the prices on its legacy plans. “This change helps us continue providing reliable network service, quality products, and great customer experiences.”

In an attempt to take some of the pain out of the price increase, AT&T is adding an extra 20GB of hotspot data each month. If you want to stay on your current legacy plan, you don’t have to do anything. “Just continue to enjoy your existing plan benefits,” AT&T says.

There is a reason why carriers like to hike pricing on legacy plans. Because they typically are cheaper and less profitable than a wireless provider’s current offerings, prices rise in an attempt to get legacy plan users to switch to a more profitable plan. The decision to hike legacy plan pricing should result in higher revenue and profits for AT&T. As a result, the carrier’s shares bucked the trend on Wall Street Friday. Despite a massive 444 point drop in the Dow Industrials (-0.96%), AT&T shares rose 2.57% or 57 cents to close the week at $28.31. 

AT&T’s Q4 churn rate was a huge warning that its customers were heading for the exit doors

We have to assume that by the end of last year, AT&T executives realized that the company had a problem. Even though the wireless provider added 1.55 million net postpaid phone adds last year, a number that seems bullish on its face, it was a 10% decline from 2024’s numbers.

What AT&T needs to do to compete with T-Mobile and Verizon

What AT&T needs at this point is a marketing plan. When you think about T-Mobile, you think of the Un-carrier, T-Mobile Tuesdays, and the advertising campaigns starring Scrubs’ Zach Braff and Donald Faison. Verizon is still known as the “premium” wireless service provider; this is the reputation that the company wanted to have with its famous “Can you hear me now?” ads depicting a Verizon field technician constantly testing for a better signal. Those commercials pre-date the modern smartphone era.

AT&T is lacking a brand identity. From 2007 to 2011, the carrier practically tied its wireless identity to the iPhone during those years. Sure, AT&T had a popular and long-running ad campaign starring actress Milana Vayntrub as saleswoman Lily Adams. Despite the long run, the ads failed to define AT&T to consumers.

The U.S. wireless landscape is changing. With T-Mobile in the midst of transitioning to become a digital carrier, and Verizon supposedly putting customers over profits, AT&T must figure out what part of the U.S. wireless landscape it wants, and let the public know through a marketing blitz.