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Telstra (ASX:TLS) share price up as mobile prices raised again

The Telstra Group Ltd (ASX:TLS) share price is up 2% after the telco announced it would be increasing mobile prices for consumers.

The Telstra Group Ltd (ASX: TLS) share price is up 2% after the telco announced it would be increasing mobile prices for consumers.

Higher mobile prices

Telstra is going to increase its postpaid mobile plans from 27 August 2024 and its pre-paid mobile plans from 22 October 2024. These changes will see most Telstra mobile prices increase by between $2 to $4 per month.

This comes after Telstra said it would not be increasing prices in line with CPI inflation. The company said the change “simplified Telstra’s pricing approach to be more consistent across its products and services, reflected there are a range of factors that go into any pricing decision and provided greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs.”

Why is it increasing prices?

The company justified its decision by saying it “balanced its 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.”

Telstra pointed out that over the five years to the end of FY24, network traffic on Telstra’s mobile network has increased by approximately 3.5x and continues to grow by 20% per annum. To manage that demand, Telstra said it has invested $1.3 billion in mobile spectrum in FY24, and as this spectrum is deployed on the network, it is providing “additional capacity to support more data, faster speeds, and a more consistent experience for customers.”

The business said for eligible concession customers, it would increase the data allowance for its postpaid starter plan while keeping the price the same.

It said that it continues to support over 1 million customers in vulnerable circumstances to “stay connected and contributed more than $90 million value through social and community investment programs.”

Final thoughts on the Telstra share price

Considering the ‘sticky’ nature of Telstra’s service and customers, I think this is likely to lead to higher revenue and earnings for the company, hence the higher share price. It’s one of the more the attractive ASX blue chip shares in my opinion, with ongoing earnings growth potential.

I’d rather buy Telstra shares over most other banks and miners, with potential for ongoing earnings and dividend growth.

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