from the the-circle-of-life dept
Antitrust and telecom experts warned anybody who’d listen that the Sprint and T-Mobile merger (which reduced the number of major U.S. wireless players from four to three) would eventually result in layoffs and higher prices for everybody. The layoffs were quick to arrive (T-Mobile laid off more than 5,000 employees before the ink was dry), though the price hikes were slower to materialize. At first.
Over the last few weeks, AT&T, Verizon, and T-Mobile have all slowly but steadily started nickel-and-diming consumers. Like most telecom prices hikes, the fees largely came in the form of sneaky fees, and were blamed on everything except reduced competition in the space.
Verizon, for example, increased the “administrative charge” it places on millions of user wireless bills from $1.35 to $3.30. Then immediately pretended this wasn’t a price increase and tried to imply it was all the fault of government regulation:
“To be clear, this is not a price plan increase for consumer lines,” a Verizon spokesperson told Fierce in a statement. “From time to time, we review and make adjustments to fees to defray some of Verizon’s administrative and telco expenses and costs of complying with regulatory requirements. To that end, Verizon Consumer will implement a change beginning in June.”
AT&T also implemented price hikes on numerous tiers ranging from $6 to $12 a month. T-Mobile, the one-time pesky upstart that made a name for itself by initially not nickel-and-diming users with obnoxious fees, quietly announced it would be boosting it upgrade and activation fees by $5.
Once all three companies got done implementing their various price hikes, they then set about playing a little game where they pretended to be mad about the other companies’ price hikes, which in a consolidated market are about as natural as water flowing downstream:
Verizon said it “will not sit on the sidelines and watch as the Un-carrier continues to hoodwink consumers by dazzling them with one catchy announcement after another, only to Un-ravel and Un-do them just as soon as people forget.”
Again, economic evidence from other countries where the total number of major wireless competitors consolidated from four to three made it clear that price hikes would be inevitable. T-Mobile will try to buck this trend for a while to maintain its reputation as the “uncarrier,” but Wall Street gets what Wall Street wants eventually. And Wall Street wants for these companies to exploit reduced competition with higher rates — while pretending they’re “fiercely competing on price,” of course.
As it gets worse, all three companies will increasingly blame inflation, despite the fact that a major cause of inflation can oven also be… unchecked consolidation. And the U.S. tech press will largely just repeat the claims, making it trivially easy for an increasingly consolidated telecom sector (and advocates of consolidation) to avoid any meaningful introspection or accountability whatsoever.