Friday, February 10, 2012

AT&T to double handset upgrade fee, claims 'increased costs'

AT&T is scoring a lot of hits this week, although we mean that in a negative way. First the carrier was said to be throttling customers with grandfathered unlimited data plans when they crossed 2GB, despite the fact that the company offers a tiered data plan of 3GB for the same monthly fee, and now the company has announced it will be doubling its handset upgrade fee from $18 to $36.

The change is effective Sunday, Feb. 12, 2012. The company has explained the reasons behind the increase as follows:

“Wireless devices today are more sophisticated than ever before. And because of that, the costs associated with upgrading to a new device have increased and is reflected in our new upgrade fee. This fee isn’t unique to AT&T and this is the first time we’re changing it in nearly 10 years.”

It's true, the fee isn't unique to AT&T. In the U.S., Sprint also charges $36. T-Mobile charges $18. Verizon, the nation's largest carrier, charges nothing.

While AT&T says the costs associated with upgrading to a new device have increased, we'd have to wonder what the heck they're talking about. Swapping a SIM into a new device hasn't gotten harder over the last few years.

All the back-end stuff is automated, so that hasn't changed. If anything, it's gotten easier.

A brief look around the Web shows the reaction to be swift and harsh. Most people have the same thoughts as we do. In other words, they would like AT&T to explain exactly how the costs of upgrading have increased.

In our mind, they have increased this way: they've gone up from $18 to $36. They've gone up because AT&T lost its bid to acquire T-Mobile, and it has to make up the money somehow. And they've gone up because AT&T says they have.

In other words, there's no real basis in reality to explain that the actual costs have gone up.

It's exactly the same sort of reasoning that we believe AT&T is using with regard to throttling at 2GB. They have a 3GB plan that costs exactly the same as the unlimited plan. If there were really concerned about network overload, as they say they are, why are they offering such a plan?

Simple: they want to eliminate the grandfathered unlimited plans.

[We can only hope is that Verizon doesn't follow suit with this attempt to rid themselves of grandfathered unlimited data plans.]

AT&T isn't scoring any points with these moves. Once an LTE-based iPhone is released, you might see a number of customers drop their GSM iPhones and move to Verizon, which has the nation's largest LTE network.



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