This is what happens when competition is, basically, non-existent. On Friday, Engadget reported that AT&T would be doubling its upgrade fee from $18 to $36.
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.
What, exactly, does AT&T have to do when a customer upgrades her phone? I don’t know, because I’ve never gone through AT&T to get an upgrade. When I “upgraded” from a Blackjack to an Apple iPhone 3GS, I did so at the Apple Store. Ditto when I upgraded to an iPhone4. And I’ll get my iPhone5 at an Apple Store, too.
But AT&T is our provider. Does that mean that I have to pay this $36 even though Apple is doing the work, whatever work is entailed — work that I could have done myself had I had Apple send the phone to my house.
It’s bad enough that we are tied into a two-year agreement for service, an agreement that ostensibly subsidizes the cost of phone but that does not drop in price after the two-year “subsidy” is over. Nor is there a lower contract price for a phone that has been paid for — you know, if you buy a used one or share a used one with a friend.
I suppose current customers are being asked to cough up more dough to pay for AT&T’s disastrous $6.2 billion bill associated with its ill-advised attempt to buy T-Mobile as well as pension accounting (ie, paper loss). Verizon also posted “a $2 billion loss due to a change in its pension accounting.”
AT&T revenue for the fourth quarter, of course, was up 4 percent: from $31.4 billion last year to $32.5 billion this year.
cNet analysis of AT&T’s fourth quarter earnings explains why AT&T wants more money when customers upgrade. For both AT&T and Verizon:
… the iPhone made up more than half of the carriers’ smartphone activations. Without the device, they would have faced a continued slowdown in its postpaid subscriber growth.
There is nothing from mainstream media — print or electronic — about this story as of this writing.