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June 28, 2018

AT&T More Than Doubles Administrative Fee for Wireless Customers

by John_A

AT&T has raised the amount of the “administrative fee” that it charges many of its 64.5 million wireless customers, a move that will earn the company an additional $800 million in annual revenue.

The fee hike was first noticed by BTIG Research analyst Walter Piecyk (via CNBC), who pointed out that AT&T has increased its monthly fees by approximately $1.23 in 2018 with two price hikes in April and June. Customers are now paying $1.99 in administrative fees, up from 76 cents last year.

Approximately 85 percent of AT&T’s customers have seen the fee hike, as it applies to all postpaid accounts. Prepaid customers are not required to pay the administrative fee.

Prior to the doubling of the fee, it hadn’t changed much since AT&T introduced it in 2013, going from 61 cents to 76 cents over a period of several years.

Piecyk speculates that AT&T has increased the fee to offset the debt incurred by its recent $85.4 billion purchase of Time Warner. “Presumably the Administrative Fee is another way to help AT&T fund its network build and Time Warner acquisition going forward,” he wrote.

In a statement to CNBC, however, AT&T said that the fee is standard across the wireless industry: “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.”

Earlier in June, AT&T also raised the price of its grandfathered unlimited data plans by $5 per month. That plan, which was originally priced at $30, is now $45.

Tag: AT&T
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