AT&T must be run by magicians. The company is turning a mere 61 cent monthly fee into hundreds of millions of dollars.
But instead of delighting an enchanted audience, AT&T has mostly angered its customers with its new "Mobility Administrative Fee," which went into effect for all monthly cellphone contracts on May 1. The company has more than 107 million wireless subscribers, so the new fee stands to bring in $775 million each year. OK?
Here's AT&T's explanation for the price add-on: "Consistent with similar fees charged by other carriers, the monthly fee of 61 cents per line will help cover certain expenses, such as interconnection and cell site rents and maintenance," AT&T's executive director of media relations, Mark Siegel, told The Huffington Post. The fee applies to all "postpaid (contract) consumer wireless customers."
The new fee should not have come as a surprise to the AT&T customers who read their bills carefully. "Customers were given a full thirty days advance notice of this fee in their April bills. The fee is summarized and identified as a line item on every single monthly bill," Siegel said.
AT&T customers took to Twitter to complain:
Analyst Jon Hoffman discussed the issue on market intelligence company ABI Research's blog on Thursday. Calling the fee "arbitrary," Hoffman writes that AT&T imposed the fee "Because they can."
Hoffman explains that AT&T added a fee instead of simply raising prices for service because they want to be able to charge customers nice, even prices. "Suppose AT&T decides on a direct price increase - how awkward do these sound? Data usage is beyond mass market comprehension, so keep it simple - $30/3 Gigabyte. $50$/5 Gigabyte," Hoffman writes.