AT&T more than doubles 'administration fee' on post-paid phones, tablets and smartwatches

Posted:
in General Discussion edited June 27
AT&T could add some $970 million to its annual revenue by increasing from 76 cents to nearly $2 an "administrative fee" that shows up as a line item buried deep in customers' monthly bills.

AT&T Logo


The charge started at 61 cents per line back in 2013 and has stayed largely the same over the past several years, only increasing by 15 cents until a steep hike in April. That is when some eagle-eyed customers noticed the admin fee jumped to $1.26 before once again increasing to $1.99 in June.

As noted by BTIG Research analyst Walter Piecyk on Wednesday, the increase affects roughly 85 percent of AT&T's 64.5 million post-paid phone lines.

This fee not only impacts monthly cell phone subscribers, but those using cellular service on watches and tablets as well. That includes users of the new Apple Watch Series 3 with LTE support that debuted last fall. Pre-paid phones will not incur these new charges, AT&T said.

When AT&T introduced the controversial fee, it said the funds help "defray certain expenses AT&T incurs, including but not limited to: (a) charges AT&T or its agents pay to interconnect with other carriers to deliver calls from AT&T customers to their customers; and (b) charges associated with cell site rents and maintenance."

In a statement to Fortune AT&T doubled down on this rationale saying, "This is a standard administrative fee across the wireless industry, which helps cover costs we incur for items like cell site maintenance and interconnection between carriers."

What is perhaps more likely is that AT&T is looking for new ways to increase revenue after spending $85 billion to acquire Time Warner, then turning around to spend more to acquire digital advertising company AppNexus.

"It's hard to believe that interconnection costs have increased in the past 6 months enough to justify this fee increase," Piecyk said in a blog post. "In fact, wireless operators have been crediting LOWER interconnection costs when explaining why their cost of service was in decline."

While AT&T peddles the ideology that such fees are standard in the industry, T-Mobile CEO denies the sentiment. "Another example of @ATT putting their wallets ahead of their customers," John Legere said on Twitter. "Declining YoY service rev for 16Qs in a row will make you do some really terrible things to your customers."

T-Mobile dropped similar fees and taxes as additional line items on bills last year.
Alex1N
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Comments

  • Reply 1 of 31
    bhupeshbhupesh Posts: 6member
    Another change effective this month... they now charge a late fee the day after your payment is due. They used to wait until the next billing statement, which was in effect a 10 day grace period. No more.
    jbdragonkudu
  • Reply 2 of 31
    mac_dogmac_dog Posts: 581member
    this is how they increase their stock value. they can’t innovate, so they bleed their customers to death. maybe it’s time to switch.

    If this isn’t enough to convince you, maybe the fact that at&t is in bed with the NSA will convince you. It is a well known fact that they (the NSA) occupy an entire floor in the at&t building in San Francisco. 
    williamlondonjbdragonfrankiekuduAlex1N
  • Reply 3 of 31
    welshdogwelshdog Posts: 1,618member
    AT&T is a wretched anti-consumer company. They weren't so much in the distant past, but when SBC bought them, it all went to hell.  SBC itself has been a seriously anti-consumer company for decades and decades.  SBC aggressively mounted huge legislative campaigns in states where they operated with the sole purpose of getting laws passed to make them more money, to gain unfair advantage.  They became experts at this and ultimately dragged the whole industry with them - inlcuding AT&T eventually. Thoughtout the 90s and 00s AT&T and SBC battled each other in the legislative arena, trying to win advantage for themselves and to disadvantage the other. I know this because I edited TV spots during this time - for both companies actually.  One producer I worked with handled a part of the SBC push in Texas.  After one sucessful campaign she was invited to a celebratory diiner thrown by SBC.  At that dinner the CEO of SBC stood up and told everyone, that through their efforts SBC would make an additional $900 million in Texas that following year.  All by making a bunch of TV spots and giving money to politicians to change laws.

    So yeah, they are going to raise your bill whenever they feel like it and are going to give you vague, mealy- mouthed reasons for doing so.  They are a confederacy of weasels.  Compared to these sphincters, Apple is Mother Teresa.
    mjtomlinRayz2016fotoformatrcfajbdragonfrankiekudubshankAlex1N
  • Reply 4 of 31
    chasmchasm Posts: 849member
    This is just the start, AT&T customers. This change might be fairly painless to most customers, sure, but it doesn't even cover the first billion of that $85B they spent. Their total debt is IIRC around $180B. Pay up suckers!
    jbdragonAlex1N
  • Reply 5 of 31
    mjtomlinmjtomlin Posts: 1,777member
    Agree with anti-SBC sentiment above. They are an abysmal corporation with the absolute worst customer service. I finally ditched AT&T last year after almost a decade of using their service. Took advantage of Virgin Mobile’s deal - $1 for an entire year of service. I’m billed 8¢ every month.

    Sure I don’t have the same “national” coverage, but I don’t travel, so it’s a moot point.

    chasmjbdragonwelshdogAlex1N
  • Reply 6 of 31
    tallest skiltallest skil Posts: 43,399member
    🎶 Bustin’ makes me feel good…” 🎶

    edited June 28 frankietshapibuzdots
  • Reply 7 of 31
    sjgreensjgreen Posts: 1member
    Only in America would this happen - pure profiteering 

    Here in the UK none of her phone networks have silly charges like this. Our plans are also a lot cheaper plus give a lot more data, minutes & texts each month. 
    chasmwilliamlondonStrangeDaysjbdragonkuduAlex1N
  • Reply 8 of 31
    mbenz1962mbenz1962 Posts: 102member
    sjgreen said:
    Only in America would this happen - pure profiteering 

    Here in the UK none of her phone networks have silly charges like this. Our plans are also a lot cheaper plus give a lot more data, minutes & texts each month. 
    I just made a comment similar to this yesterday about plans in (continental) Europe:

    I wish these carrieres had better pricing at the lower end of the data usage spectrum. Plans here in Europe are not much cheaper for unlimited, but they are for limited.  I pay 25 Euro ($30) for 2.5GB a month for two lines with the market leading coverage (comperable to Verizon) all taxes and fees included.  On AT&T the closest comperable is $20 per device (so $40 for two lines) and $50 for 5 GB to share.  That is $90 plus taxes and fees for two lines.  If I up my data another 2.5 GB to compare, it would cost another 20 Euro ($25).  So the same 5 GB service that AT&T charges $90+, I can get for ~$55 all fees included. This can be even cheaper if I choose other carriers with less robust coverage.
    rcfaAlex1N
  • Reply 9 of 31
    lightknightlightknight Posts: 2,312member
    mbenz1962 said:
    sjgreen said:
    Only in America would this happen - pure profiteering 

    Here in the UK none of her phone networks have silly charges like this. Our plans are also a lot cheaper plus give a lot more data, minutes & texts each month. 
    I just made a comment similar to this yesterday about plans in (continental) Europe:

    I wish these carrieres had better pricing at the lower end of the data usage spectrum. Plans here in Europe are not much cheaper for unlimited, but they are for limited.  I pay 25 Euro ($30) for 2.5GB a month for two lines with the market leading coverage (comperable to Verizon) all taxes and fees included.  On AT&T the closest comperable is $20 per device (so $40 for two lines) and $50 for 5 GB to share.  That is $90 plus taxes and fees for two lines.  If I up my data another 2.5 GB to compare, it would cost another 20 Euro ($25).  So the same 5 GB service that AT&T charges $90+, I can get for ~$55 all fees included. This can be even cheaper if I choose other carriers with less robust coverage.
    9€ a month for unlimited calls to all of Europe and the US, 30GB of data (non throttled). 3GB when travelling inside of the European Union, still unlimited calls. And unlimited SMS.
    My gf has 50GB for the same price because she got a switch-now offer from the competition.

    US prices are a rip-off that is, maybe, the best demonstration that US-style liberal capitalism does NOT work for the simple reason that big money can easily influence lawmaking. Monsanto-Nestle and AT&T are remarkable showcases for this, but John Oliver's shows have ridiculous amounts of other examples...

    edited June 28 williamlondonrcfajbdragonmontrosemacsAlex1N
  • Reply 10 of 31
    sandorsandor Posts: 466member
    Speaking of ridiculous cellular charges...

    does Verizon still charge the $20 "line access fee" for each phone?   :s
  • Reply 11 of 31
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.

    One note about AT&T and it's history, remember this is the behemoth that was broken up into the baby bells (landmark case) - btw, that was the second time I believe an antitrust accusation and case was levelled against the company. AT&T is an ugly evil corporation that does nothing except suck the blood out of its customers, legally and illegally, it matters not.
    jbdragonfrankieAlex1N
  • Reply 12 of 31
    dewmedewme Posts: 1,692member
    This is a pure and simple money grab and another example of what happens when corporations and their armies of lobbyists are calling all the shots by greasing the palms of elected and appointed officials. These constantly rising carrier fees without a commensurate rise in the quality of service delivered to customers are a clear and present danger to technology companies like Apple.  All the innovation in the world by Apple cannot save it from parasites like AT&T. My decision to not purchase a Series 3 Apple Watch with LTE is entirely based on my refusal to put more money into AT&T's coffers. 

    The bad news is that it's only going to get worse.
    williamlondonjbdragonfrankieAlex1N
  • Reply 13 of 31
    MacProMacPro Posts: 17,588member
    sjgreen said:
    Only in America would this happen - pure profiteering 

    Here in the UK none of her phone networks have silly charges like this. Our plans are also a lot cheaper plus give a lot more data, minutes & texts each month. 
    Well having lived a lot in both places I sure as hell don't miss VAT (what is it now 17%?) and orange traffic cones on all motorways all the time ;)
    jbdragon
  • Reply 14 of 31
    Maybe it's time to cut the wireless footprints as well? Remember how life was without cellular wireless phones? Maybe just use a wireless cell phone for calls only and drop the data part of it? ...I'm just saying. I dropped AT&T several years ago because of poor, sluggish signal service areas like in places like downtown Chicago, which is totally unacceptable. Customer service wasn't the greatest either. If you pay 100(s) of dollars for wireless service, you should have fast wireless coverage every area that you travel in. Guess that the AT&T feels that it can flex it's monopoly powers already, huh?
  • Reply 15 of 31
    FolioFolio Posts: 382member
    The dense population of many Asian and European countries makes cellular rollouts easier and cheaper. I wonder how USA wireless compares with those of Brazil, Australia, and Russia? I recently switched from T-Mobile to AT&T. The slightly higher monthly bill is offset for me by their subsidized content (discounted DirectTV Now bundle, free HBO for life, free Readly for year). Plus free LTE/4G streaming of that native content. If that changes in future, at least it’s less painful to switch service providers today. So options are greater than ever (and yes more confusing). Might be good for Apple. I’ve got unlocked fully paid phones direct from Apple. Don’t know how Apple’s phone purchase program is doing overall, but— outside of 2 for 1 deals—you’d think more people would pay monthly fee to Apple, rather than being hooked paying off Verizon etc. simply to be able to switch more easily, particularly with 5G rollout coming, which likely will be a differentiator among providers.
  • Reply 16 of 31
    williamhwilliamh Posts: 611member
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.

    One note about AT&T and it's history, remember this is the behemoth that was broken up into the baby bells (landmark case) - btw, that was the second time I believe an antitrust accusation and case was levelled against the company. AT&T is an ugly evil corporation that does nothing except suck the blood out of its customers, legally and illegally, it matters not.
    Ah yes, the sanity in the UK.  For how much longer will you be permitted to own a kitchen knife?  When you turned 18, did you celebrate by going out to buy your first pair of scissors?  Or perhaps a dinner place setting with a fork, spoon, and butter knife?  All prohibited until you reached the age of majority?

    It might surprise you to know that Americans are not required to be customers of AT&T.  I'm guessing the company does provide services other than sucking customer blood. I'm not sure customer blood sucking is a sustainable business model.  I was an AT&T customer for many years (started with Cingular before they were bought by AT&T).  The fees were generally reasonable and the service was good enough. I switched to T-Mobile a few years ago.  Very pleased with that decision. Purely voluntary on my part. Paying $114 or 87 pounds at the current rate for 4 lines of service.

    I found that unlimited plans in the UK cost about the same as in the US. We do have some very cheap pay-as-you-go options as in the UK, but many people choose not to avail themselves of that option.  If you don't have any money at all, you can even get free cellular service in the US. 
    georgie01jbdragontallest skil
  • Reply 17 of 31
    sandorsandor Posts: 466member
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.

    One note about AT&T and it's history, remember this is the behemoth that was broken up into the baby bells (landmark case) - btw, that was the second time I believe an antitrust accusation and case was levelled against the company. AT&T is an ugly evil corporation that does nothing except suck the blood out of its customers, legally and illegally, it matters not.
    ATT
    Verizon 
    CenturyLink (formerly Qwest)

    all Baby Bells, and the ones of the 8 that survived. They all bought up the lesser babies too...
    The breakup of Bell happened 36 years ago. 

  • Reply 18 of 31
    williamh said:
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.

    One note about AT&T and it's history, remember this is the behemoth that was broken up into the baby bells (landmark case) - btw, that was the second time I believe an antitrust accusation and case was levelled against the company. AT&T is an ugly evil corporation that does nothing except suck the blood out of its customers, legally and illegally, it matters not.
    Ah yes, the sanity in the UK.  For how much longer will you be permitted to own a kitchen knife?  When you turned 18, did you celebrate by going out to buy your first pair of scissors?  Or perhaps a dinner place setting with a fork, spoon, and butter knife?  All prohibited until you reached the age of majority?

    It might surprise you to know that Americans are not required to be customers of AT&T.  I'm guessing the company does provide services other than sucking customer blood. I'm not sure customer blood sucking is a sustainable business model.  I was an AT&T customer for many years (started with Cingular before they were bought by AT&T).  The fees were generally reasonable and the service was good enough. I switched to T-Mobile a few years ago.  Very pleased with that decision. Purely voluntary on my part. Paying $114 or 87 pounds at the current rate for 4 lines of service.

    I found that unlimited plans in the UK cost about the same as in the US. We do have some very cheap pay-as-you-go options as in the UK, but many people choose not to avail themselves of that option.  If you don't have any money at all, you can even get free cellular service in the US. 
    Kitchen knives? Are you serious? Seems a strange pro-US cheer to lead with, but perhaps it'd feature better as a tourism-based advertisement campaign?! ;-)

    You can defend AT&T (and other telcos) all you want (and other silly American ways of life - btw, I lived there more than 30 years, was even born there, so I don't need a lesson in all things American), but you're just coming across very defensive and partisan and very apologetic (as in apologism not remorse), if you want to argue that telcos in the US are reasonable in their charges, well, I think you argue an odd position.

    My point is that AT&T is not your friend, it's so utterly anti-consumer I'm amazed it still exists. One very good reason (aside from the other one I mentioned earlier): just a few years ago it illegally spied on its (and others') customers, then bribed congress to write a law that would absolve it of past crimes, which it did. Defend that.
    frankie
  • Reply 19 of 31
    georgie01georgie01 Posts: 180member
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.
    I was just in London visiting family and decided to get a Vodafone 20GB pay-as-you-go plan while I was there. It was £30 ($40). My T-Mobile plan in the US has four unlimited lines for $116/mo.—I got two free lines last year but even the original $58/line which I got at the end of 2014 was quite good.
    edited June 28
  • Reply 20 of 31
    georgie01 said:
    It's shocking to read the monthly payments Americans make for their phones, it's like people are not listing their monthly phone payment details but rather their car payments, they're huge and utterly ridiculous. Thank goodness there's some sanity here in the UK.
    I was just in London visiting family and decided to get a Vodafone 20GB pay-as-you-go plan while I was there. It was £30 ($40). My T-Mobile plan in the US has four unlimited lines for $116/mo.—I got two free lines last year but even the original $58/line which I got at the end of 2014 was quite good.
    And I was just reading about someone on an Ars forum who paid $350/mo. for his family phones - that is utterly insane, and it's figures like that which aren't uncommon, the internet is filled with people spouting such figures, and I've never read about anyone here paying such exorbitant sums (perhaps I'm out of touch here?). Sometimes I read people surmising that it's how MVNOs differ here, I'm not sure, though I personally do use one.

    (BTW, PAYG and contracts probably aren't fair to compare.)
    edited June 28
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