May. 25th, 2013

thewayne: (Cyranose)
Amazing. You have a captive audience, many of whom are under contract and can't get out, and you force them to add pure profit to your bottom line.

All emphasis mine.

"The Wall Street Journal is reporting that AT&T Mobility, the second-largest wireless carrier in the U.S., has added a new monthly administrative fee of 61 cents to the bills of all of its contract wireless lines as of May 1, a move that could bring in more than a half-billion dollars in annual revenue to the telecom giant. An AT&T spokeswoman said the fee covers 'certain expenses, such as interconnection and cell-site rents and maintenance.' The increased cost to consumers comes even though AT&T's growth in wireless revenue last year outpaced the costs to operate and support its wireless business. The company has talked of continuing to improve wireless profitability. Citigroup analyst Michael Rollins noted that the new administrative fee is a key component for accelerating revenue growth for the rest of the year. He said the fee should add 0.30 of a percentage point to AT&T's 2013 revenue growth; he predicts total top-line growth of about 1.5%. Normally, consumers could vote with their wallets by taking their business elsewhere. AT&T would be required to let customers out of their contracts without an early termination fee if it raised prices, but it is avoiding this by simply calling the increase a 'surcharge,' effectively forcing millions of people to either pay more money per month or pay the ETF."

In the words of Mel Brooks, It's good to be the king! It's even better when you have a huge captive audience.

There's a reason why I switched to Verizon when Alltel, when my cell carrier, was sold to AT&T.

http://news.slashdot.org/story/13/05/24/1210203/att-quietly-adds-charges-to-all-contract-cell-plans


Why am I immediately reminded of a couple of years ago when AT&T wanting to buy T-Mobile "to expand their network" when (a) T-Mobile's network was frequency-incompatible with AT&T's, and (b) it would have cost less to upgrade their network than buy T-Mobile?

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