Telstra to boost phone plan prices despite inflation – and despite claiming they wouldn’t 2 months ago

Telstra (ASX:TLS) has announced on Tuesday its plans to raise the cost of its mobile phone plans across the country by $2-$4 AUD nationwide starting in October.

The company said in May this year it “would not be increasing prices in July” while it updated its consumer and small business prepaid mobile plans to remove an annual review linked to CPI data.

“In making these price changes, Telstra has balanced cost of living pressures it knows some of its customers are experiencing, with its need to continue to invest to manage technology evolution and continued strong customer demand on its mobile network,” the company wrote on Tuesday.

However, that situation has changed.

The company reported in the five years to July 2024, network traffic on Telstra’s network has increased by 3.5x and increases by 20% per annum. As a result, Telstra says it’s spent $1.3B on system upgrades through FY24 alone.

All in all, the company painted itself as being forced into raising costs on Tuesday. To be fair, an increase of $4 per month is an extra $50 per year – not enough to break the bank but probably not the most desirable outcome for those on the customer end of things already struggling.

To that end, the company said it will keep prices the same for some concession-facing products, including starter kits likely the purview of students and/or new arrivals into the country.

TLS last traded at $3.65. Its 1Y returns are down -14.3%.