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Carriers Will Raise Rates This Year

by Tom Moccia | January 25, 2011January 25, 2011 4:00 am PDT

Wireless carriers have kept rates pretty stable over the last two or three years, but with the eventual move to LTE and 4G (every carrier has its own catch phrase) it seems as if rates will be on the rise. Verizon, AT&T, Sprint and T-Mobile have either already raised rates or taken away some of the customer loyalty discounts that had been in place for quite some time. In any event, US carriers will be taking a little more of your hard earned cash and giving back a bit less. Let’s summarize the financial moves for each carrier.

Verizon

It has been well documented that the nation’s largest carrier decided to stop offering it’s “New Every Two” discount program for users who renew their two-year contracts. The promo gives customers credit of $30 to $100 after they complete 20 months of a two-year agreement.

Any one with a current Verizon contract is grandfathered into the program, but new customers going forward will not have that future discount. That means you, potential Verizon iPhone owners.

With LTE on the way it’s also likely that Verizon’s smartphone data plans will head north, especially the current unlimited-data offering. The company has yet to announce pricing for LTE phones that will be available mid year, but CEO Ivan Seidenberg has made it clear that customers will have to pay for the faster service.

Finally, Verizon has yet to announce data pricing for the iPhone 4, but the rumor mill anticipates unlimited will be available, we just hold our breath on pricing.

AT&T

The end of this month will be when several changes go into effect for AT&T, similar to Verizon, they are eliminating discounts to existing existing customers. Unlike Verizon, AT&T will extend the $50 to $100 customer loyalty discounts through July 23. Oddly this is right around the time that the iPhone 5 is expected to hit AT&T.

The company is also increasing the price of adding a line to a family plan. The activation of an additional line will go from $10 to $36 per line. Now I get the fact that the cost of doing business increases incrementally, but a 260 percent increase for what amounts to a representative following through with a few keystrokes? This is a simple case of gouging the customer. “Thank you for choosing AT&T, but before we provide one iota of service it will be $36 please.” Honestly, sometimes I feel AT&T should be paying me to use their service.

It has been well documented that AT&T has replaced the current $5 for 200 text messages and $15 for 1500 message plans, and replaced them with $10 for 1000 messages. Overages will be billed at 10 cents a message while unlimited text plans remain at $20 for a single line, and $30 for a family plan.

Finally, AT&T will be raising the cost of its microcell from $149 to $199. This is odd consider we just reported AT&T will be offering free microcells to users whom live in poor cell reception areas.

Sprint

Sprint is no angel in the price raising extravaganza either. In the past, 4G data users were charged an additional $10 on top of their usual data usage charge. Come on, $10 for the privilege on using 4G? I don’t remember 3G costing anymore than EDGE, oh, unless you were an AT&T customer with an iPhone 3G, but I digress. I have always said it benefits the company to have more users on 4G than 3G, so why charge people more money per month for being early adopters?

Apparently, Sprint was listening, because now all smartphone users will be charged an additional $10 for data, not just 4G users. Thanks for nothing Sprint!! The cheapest rate plan on Sprint is now $80. Current customers fear not, the company won’t be gouging you, but all new subscribers get ready to pay. So much for having consumer friendly rates to raise Sprint from the ashes.

T-Mobile

The last carrier to raise rates, and in fact, as of this writing there have been no announced rate hikes. Alas, T-Mobile is hardly the innocent kid on the block as the company starts throttling users download speeds once they exceed 5GB of data per month. Granted, most people never get to 5GB per month, but I bet there will be a power user out there posting in the comments about how this is unfair. Quite honestly, I agree.

So there you have it, prices on all the carriers besides T-Mobile will one way or another go up this year. Maybe if they spent less money on advertising, they wouldn’t need to nickel and dime the customers for this, that, and the other thing.

What are your thoughts on all the rate changes coming down the pike?


Tom Moccia

Tom Moccia is a native of Stamford, Connecticut and moved his family west in 2000 and now calls Stockton, California home with his wife and two...

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