AT&T Milks an Extra $500 Million from Customers Just 'because they can'

[dgstorm]

AT&T just enacted a new administrative fee of $.61 cents to the bills of its wireless subscribers. Most people won't even bat an eye at such a paltry price increase, and apparently AT&T is counting on that. At worst, when some folks see the fee they may have a twinge of frustration that a new fee has been added, but its small amount might not even get the attention of others. What is interesting is that this new fee will actually generate over $500 Million more dollars for the company, and there is no reason for it whatsoever. In fact, a research analyst recently commented that the only reason they are adding this fee is simply "because they can."

Joe Hoffman, principal analyst at ABI Research said, “Why would AT&T do this? Because they can, and it is all in the pricing strategy. Now that AT&T is comfortable with their shiny new pricing tools and flexibility that comes with them, looks like someone in the Executive MBA program has discovered Price Elasticity of Demand.” Furthermore, there is talk that they may even introduce slight increases to this fee over a period of six to nine months, just to gauge the reaction.

Mr. Hoffman elaborated,

“Why 61¢, why not $1 or $5 or $10? Because AT&T understands price elasticity of demand. When AT&T raises the price by 61¢, they know hardly anyone is going to bail on them, and so can impose this with impunity. $1 or $5 or $10 is just too much to swallow all at once, but give them time. For now, $500 – $600 Million will flow right to the bottom line. Brilliant! No fancy software tools, no focus groups, no high priced engineers and programmers, and no iPhone subsidies. Just a raw, brute force price increase.”

What do you guys think? At what level would a price increase start sending you heading for another carrier?

Source: BGR

 

[johnomaz]

My wife's contract is up with Verizon next month and the plan is for her to go to tmobile. If the service is good and the speeds are good I'll be joining her when my AT&T contract is up. TMobile isn't perfect but AT&T and Verizon are cesspools.

 

[sNuFfYStiGLiTZ]

My wife's contract is up with Verizon next month and the plan is for her to go to tmobile. If the service is good and the speeds are good I'll be joining her when my AT&T contract is up. TMobile isn't perfect but AT&T and Verizon are cesspools.

I switched from Verizon to sprint and finally now I'm on T-Mobile with an unlocked nexus 4. I'm loving it. The HSPA+ speeds are pretty damn good.

 

[kodiak799]

I didn't think they could change contract terms like that (applies to fees as well as the rates). Thought VZW tried something similar and they got smacked for it.

 

[pc747]

At&t just trying to do like big bro.

Man im badly rooting for T-mobile to get more coverage.

 

[johnomaz]

Its supposed to be good in my area and I'm really hoping it is. Before I got LTE from ATT, the HSPA speeds were just fine for me. I'm not a bandwidth monster. I'll be happy with 5down and 2up and those are very easy speeds for H+ to get to.

 

[Dalvik_Cache]

Sounds about right.

 

[Crankintopwater69]

If you're not with Tmo,then Im saving a seat just for you.

 

[ruvy01]

also just left vzw for T-Mo and im loving it. i actually get faster tmos hspa speeds than vzws lte at my house :/

 

[pc747]

Right now the t mobile thing for most of us is based on location.

Sent from my SAMSUNG-SGH-I317 using Tapatalk 2

 

[Crankintopwater69]

also just left vzw for T-Mo and im loving it. i actually get faster tmos hspa speeds than vzws lte at my house :/

I'm loving this wifi calling.



Sent from my HTC One using Tapatalk 2

 

[boidsonly]

ATT is still looking to replace the lost revenue over the failed carrier merger. First they raised rates on U-Verse customers for no reason (other than "just because they could"). I canceled that month. Now they are gouging their mobile customers; and this is only the start.
I was seriously considering moving to ATT from VZW (my contract ended on the 19th of this month) because I wanted the LG OG Pro. Hey ATT! Guess what? I will not be coming to your network.
and I will not get the LG OG Pro Oh well...plenty of nice phones to choose from that are not on ATT.

When I get back from vacation I am going to take a very serious look at T-Mo.

 

[jseah]

The funny thing is for years people have complained that Verizon always gouges their customers with these arbitrary fees, even though all carriers do the same thing.

 

[b-jammin21]

The funny thing is for years people have complained that Verizon always gouges their customers with these arbitrary fees, even though all carriers do the same thing.

Yes but I would think its safe to say that the majority of mobile phone users are on Verizon. And they have the best network, period. So it's more frustrating when the best service provider gouges your pockets.

 

[tgyberg]

If you are with ATT, send the $.61 in separately stuffed in a bag of poo! :icon_ devil: