T-Mobile is raising the price of its premium unlimited plan by $5, or 7%, as competition in the wireless market starts to cool amid rampant merger talks. The premium plan, which adds unlimited high-definition video streaming and faster tethering for devices using a phone’s Internet connection, will start at $80, up from $75 currently.
T-Mobile’s basic unlimited plan, which downgrades streamed video to DVD quality and offers more limited tethering, still starts at $70. The company confirmed the price increase but declined to comment further.
The third-ranked carrier originally introduced its premium “One Plus” unlimited plan last year at $85 for one line, a $15 premium, then dropped the price to $75 after Verizon and AT&T included HD video and better tethering options in their unlimited plans earlier this year. Now the price will be $80, matching Verizon’s unlimited pricing.
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Up until now, the carriers have waged a fierce battle to win customers with the new unlimited data plans. Sprint was recently offering up to five lines of unlimited data for a year for only $90 a month. AT&T cut the price of its unlimited plans and started offering a $25-per-month credit for any of its video pay video services. T-Mobile eliminated added taxes and fees, equivalent to a price cut of about 10%.
But the price hike comes as the carriers have been increasingly looking to consolidate or merge with new players. Sprint was talking to T-Mobile about combining, but put those talks on hold so it could discuss a possible partnership with cable giants Comcast (CMCSA) and Charter Communications (CHTR). Regulators might look more favorably on two wireless carriers merging if competition was waning.
Also, the price wars have hurt the carriers’ profits— and stock prices.
Shares of Verizon (VZ) have lost 16% so far this year and AT&T’s (T) stock price has lost 10%. Even amid the merger talk, Sprint (S) shares are down 2% and T-Mobile (TMUS) shares have gained 4%, less than half the rise in the S&P 500 Index.