AT&T Doubles User ‘Administrative Fees’ to Collect an Additional $800M

AT&T has raised the so-called “administrative fee” — a monthly surcharge assessed to all of the carrier’s 64.5 million post-paid wireless customers — by $1.23 per month so far in 2018 — a move that will reportedly see the Big Blue carrier net an estimated $800 million in additional revenue this year and moving forward.

The increased fees were first discovered this afternoon by BTIG Research analyst, Walter Piecyk, who in an interview with CNBC News noted that the company has implemented two price hikes so far in 2018, alone, with one in April and another in June collectively bringing its customers’ monthly administrative fees to $1.99 — up from just 76 cents as of December 2017.

What’s significant about these fee hikes is that, prior to the $1.23 per month jump, AT&T hadn’t changed the fee much since introducing it back in 2013, with the initial 61 cents per month charge rising to 76 cents per month over the course of several years before doubling in the last few months.

AT&T charges the administrative fee to all its 64.5 million post-paid wireless customers. Pre-paid customers on AT&T GO plans, meanwhile, are not assessed the fee, which AT&T said in a statement to CNBC is a necessary, “industry standard” practice.

“This is a standard administrative fee across the wireless industry, which helps cover costs we incur for items like cell site maintenance and interconnection between carriers,” an AT&T spokesperson said.

Piecyk, however, begs to differ, and speculated in a research note that AT&T might have raised the administrative fee so stealthily to help it offset the costs of its recently approved $84.5 billion acquisition of Time Warner Cable.

“Presumably the Administrative Fee is another way to help AT&T fund its network build and Time Warner acquisition going forward,” the analyst wrote.

So far, an estimated 85 percent of AT&T wireless subscribers have seen the fee hike tacked onto their monthly bills, and there’s no indication that the carrier plans to revert course, or offer a more “justifiable” reasoning as to why Verizon or T-Mobile customer’s administrative fees are not $1.99 a month now, too.

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