Verizon Communications, the leading U.S. telecommunications firm by subscribers, is implementing price hikes on select wireless plans in a strategic move to bolster revenue growth following a period of post-pandemic deceleration.
Verizon’s wireless retail postpaid ARPA rose 6.2 percent and reached $131.83 in April-June 2023 as compared with $124.16 in April-June 2022.
Verizon’s wireless retail prepaid ARPU rose 0.5 percent and reached $31.42 in April-June 2023 as against $31.26 in April-June 2022.
Verizon’s ARPU indicates how much its wireless customers pay to the telecom operator on monthly basis.
Customers subscribed to the legacy Mix and Match plans will experience adjustments in pricing, with an increase of $3 for single lines and $5 for multiple lines, according to Tony Skiadas, the company’s finance chief. Speaking at an investor conference, Tony Skiadas noted that the pricing revision aims to align with the value customers receive from the plans, moving away from introductory rates.
“We felt it was the right time to take a look at pricing and remove what I’ll call the introductory part of the pricing and move to something that reflects the value for what folks are getting,” Tony Skiadas stated.
The new pricing structure is set to take effect with the September billing cycle, and notifications have already begun to reach customers over the past few weeks, Reuters news report said.
This move comes on the heels of Bloomberg’s report last month, revealing that Verizon was planning to raise its wireless home internet offering by $10 per month.
Despite facing challenges in the previous quarter, Verizon exceeded second-quarter profit expectations and surprised analysts with an increase in subscriber additions, defying projections of a potential loss. Nonetheless, the company’s consolidated operating revenue dipped by 3.5 percent during the quarter, following a nearly 2 percent decline in the previous three months.
Verizon’s decision to adjust pricing follows a similar move by its rival AT&T, which announced plans in July to increase rates on its retired Unlimited Elite plan, with the pricing adjustments reflecting in the August billing cycle.
These strategic pricing shifts indicate the telecommunications industry’s efforts to adapt to evolving market dynamics and secure sustainable revenue growth in the face of changing consumer preferences and technological advancements.