The telecom giant, AT&T recently raised their non-contract phone upgrade and activation fee to $25. The previous fee that non-contract AT&T customers had to pay was just $20. AT&T customers, who have bought the providers phone services, were excluded from paying upgrade or activation fee until July 2015.
In addition to that, the customers, who have brought a phone from AT&T on installment fee, also enjoyed activation and upgrading services for free. However, AT&T customers, who did not sign a two-year agreement with the company, were asked to pay an activation fee of $15 from July 2015. Furthermore, the provider also increased the upgrade/activation fee for their contract subscribers from $40 to $45 in the same month.
AT&T went on to raise the activation fee for their non-contract subscribers from $15 to $20 last year. The company then again raised this fee to $25 a few days ago and this has created a major concern among AT&T’s non-contract phone subscribers.
Officials from the company said that customers who approach AT&T to purchase devices on installment agreements would have to pay an amount of $25 for new upgrades or activations. In addition to that, customers who bring their phone to the network for a new line of service will also have to pay $25, although they will not be charged for upgrading their phones on an existing line of service.
“We are making a minor adjustment to our activation and upgrade fees. The change is effective today,” AT&T officials said. The telecom company also stated that they will be charging $45 activation and upgrade fee even for two-year agreements, but those deals will be “available only on select devices.”
Reports indicate that AT&T added about 1.5 million wireless customers in the third quarter of 2016 for an estimated total of $133 million. However, the wireless carrier did lose approximately 268,000 postpaid phone subscribers, and a major portion of these customers had cheaper phones with minimum features.
AT&T posted a US wireless operating margin of 29.6 percent “and a best-ever US wireless service EBITDA margin of 50.1 percent.” However, the total revenue of the company did experience a downfall of 0.7 percent year-over-year “due to decreases in service and equipment revenues.” Many experts claim that the raise in activation fees will help them company to earn a little more revenue from their subscribers.