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AT&T: Pay Us $36 If You Really Want to Upgrade That Smartphone

Phillip Dampier February 13, 2012 AT&T, Competition, Consumer News, Wireless Broadband 1 Comment

AT&T increases upgrade fee. (Photo courtesy: Engadget)

AT&T has announced it is doubling the price of its equipment upgrade fee, now charging $36 when a customer activates a new phone on their wireless account.

Our regular reader Scott sent word AT&T raised the upgrade fee Feb. 12, from $18 to $36, to “cover their costs. ” The fee now matches that charged by Sprint.

From AT&T’s official statement:

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.

Wireless companies in North America encourage more frequent phone upgrades because of their business model: pitching subsidized phones in return for a two-year contract commitment, along with higher-priced service plans which gradually recoup the cost of the subsidy.

Consumers who hang on to their phones longer than two years continue to pay higher prices for service plans designed for those who always upgrade phones every two years at contract renewal time.  Phone companies also prefer customers who live under a term contract because they are less likely to switch providers.

In the past, loyal customers not only received extra incentives and discounts when they renewed their contracts, they also had these kinds of service fees waived.  No more.  Most companies have discontinued extra upgrade discounts for existing customers and increasingly refuse to waive service and equipment fees.

Currently there is 1 comment on this Article:

  1. Matt says:

    Been a long time since long time customers got anything from carriers. New subscribers are all they care about these days. Just looking for someone else to hook into a new contract with higher costs instead of us with old grandfathered in plans.

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  • arby: Such a pain to get a better deal. But better than when Cable was a Monopoly and there were no other choices. I am in the middle of a 2 year deal...
  • doug: not for Fort Collins, is this just a short delay or no increase at all? I am in Fort Collins and have been waiting for this upgrade. arggg....
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