The Telstra Group Ltd (ASX: TLS) share price is marching higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) telco closed flat yesterday at $3.65. In morning trade on Tuesday, shares are swapping hands for $3.72 apiece, up 1.8%.
For some context, the ASX 200 is up 0.6% at this same time.
This comes as the company announces a boost to its mobile pricing plans.
Telstra share price gains on mobile pricing increase
ASX 200 investors are bidding up the Telstra share price after the telco said it will be amending the prices of its postpaid mobile plans commencing on 27 August and its pre-paid mobile plans as of 22 October.
Most customers can expect to see their Telstra mobile plans go up between $2 and $4 a month.
The company said the price increases reflect an approach that attempts to balance customer cost of living pressures with its own need to invest in evolving technologies and support continued strong customer demand on its mobile network.
Telstra noted that over the past five years, network traffic on its mobile network has increased by around 3.5 times and continues to grow by 20% a year. To help manage this demand growth, the company invested $1.3 billion in mobile spectrum in FY 2024 to support more data and faster speeds.
As the company announced on 21 May, its mobile plan will no longer be linked to an inflation-linked annual review.
Why the move away from CPI-linked price increases?
The market had mixed reactions to the telco's move away from inflation-linked mobile pricing reviews.
In fact, the Telstra share price closed down 2.7% on the day of the announcement. Although that announcement also involved the reduction of its workforce by some 2,800 employees as part of its cost-cutting program.
Commenting on the move away from CPI-linked pricing on the day, CEO Vicki Brady said, "This approach reflects there are a range of factors that go into any pricing decision and will provide greater flexibility to adjust prices at different times and across different plans based on their value propositions and customer needs."
Brady added:
We will continue to review our pricing and any changes will be communicated to customers in a timely and transparent way.
Our mobiles business continues to perform strongly, with growth in subscriber numbers for the first four months of this half consistent with the first half of FY24. This success has underpinned our EBITDA growth in FY24 … and reflects the high demand for our products and the value customers place on our differentiated network, its reliability and our flexible plans.
With today's intraday moves factored in, the Telstra share price is down 6% in 2024.
