On May 1, 2013, AT&T Inc. (NYSE:T) started adding an administrative fee of $0.61 per line for consumers that are under a contract, according to The Wall Street Journal. The new fee has been added below the service charges where taxes and surcharges appear.
Even though $0.61 does not sound like a lot of money, it can add an extra half a billion dollars in revenue for AT&T on an annual basis. AT&T currently has around 70 million contract subscribers. Multiply the $0.61 per customer per month and that adds around $43.4 million each month in extra revenue for AT&T. That means AT&T is generating approximately $520.8 million in extra revenues per year by adding that new charge. This new fee is known as the “Mobility Administrative Fee.”
AT&T said that the new charges are comparable to what other service providers charge. Verizon, T-Mobile, and Sprint customers all pay a similar fee so AT&T is not the only company that is doing this.
AT&T will use the new source of revenues for cell site rental fees and maintenance. Customers were given 30 days notice before the fee was added to each bill.
“Below-the-line fees are nothing more than a way for carriers to stealthily increase their prices,” stated Derek Turner, a research director at the public interest group Free Press in an interview with The Wall Street Journal. “AT&T’s administrative fees are no different than the hundreds of other components that go into the cost of doing business.”