AT&T's Version Of Wireless Price Competition: Raising Prices
from the that's-not-how-this-works dept
Sure, there are some occasionally decent promotions but, by and large, the name of the game right now for both AT&T and Verizon is driving network usage and shoving customers as hard as possible toward large, expensive, shared data allotments. Verizon has pretty loudly stated it's not going to seriously compete on price because it believes its network is just that good. The latest example of not-really-price competition comes courtesy of AT&T, who is responding to T-Mobile's competitive pressure by... raising fees and creating entirely new annoying surcharges:
The new activation/upgrade fee for one and two-year agreements is raising from $40 to $45, which gives AT&T the highest activation fee in the industry (Verizon is still at $40 for now). Going forward after August 1, should you choose to sign-up for a new contract to receive a discounted phone, you will pay $5 more than you used to.So yeah, AT&T's response to price competition is -- to raise prices. And its response to media inquiries so far as to why this is occurring has been total radio silence, since there's not much it could say to defend the practice. Perhaps that's the reason that while T-Mobile is seeing notable growth, AT&T actually lost phone customers last quarter?
In related news, AT&T Next will no longer be a zero-out-of-pocket installment plan. Come August 1, customers who are new to AT&T Next will have to pay a $15 activation fee when they pick up a new phone. This $15 fee also applies to those who bring their own device (BYOD) and sign-up for a new line of service.
There are still a few reasons why AT&T doesn't really have to care what you or the media thinks. One, the company's mammoth lobbying apparatus ensures it still gets favorable treatment, especially on the easily manhandled state level, where most legislators would happily sell their first born to win the company's affections. Two, AT&T still has a stranglehold over a huge swath of wireless spectrum thanks to auction rules that historically favored large companies (though that's changing... slowly). Three, AT&T and Verizon combined still control around 80% or more of the wireless backhaul special access market, which companies like T-Mobile need to pay to access in order to reach their customers.
Of course hammering customers with a bevy of annoying fees is pretty much standard operating procedure in most industries as a way to pretend your advertised rate is staying the same. But AT&T's latest greedy little cash grab is worth remembering the next time industry trade groups like the CTIA are breathlessly insisting that fierce competition is delivering a bonanza of broadband bargains. There is no "wireless price war." It's more of a theatrical pricing improvisational dance.