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AT&T raises the activation and upgrade fee on 2-year contracts

Posted: , by Maxwell R.

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AT&T raises the activation and upgrade fee on 2-year contracts
Customers of AT&T that choose a two-year service agreement will be charged a little more for the options. The second largest carrier in the US has upped the activation fee from $36 to an even $40. The fee increase applies to subsidized upgrades which would renew a two-year agreement as well.

While the move is attributed to offset the “administrative and other costs” that are part of activating (or upgrading) a device, it is probably more about making AT&T’s Next program more attractive to customers.

Customers that activate or upgrade a line using AT&T Next are not charged the activation/upgrade fee, and because they are financing the cost of the phone and not technically signing a service agreement. This feature was developed in response to T-Mobile’s JUMP! Program which was Team Magenta’s industry changing model to entice people to buy more phones, more often.

Speaking of T-Mobile, the company’s outspoken CEO John Legere had some feedback to offer in the wake of AT&T’s announcement. “What happened to copying us?” Of course, when you consider that T-Mobile no longer offers its customers a two-year service agreement option with subsidized device pricing, one could make the argument that at least AT&T (and Verizon, whose fee is still $35, and Sprint who charges $36, for now) makes the option available.

AT&T raises the activation and upgrade fee on 2-year contracts
While we have no inside information to back this theory, it stands to reason that two-year agreements are on the way out. Financing the full retail price of any given device nets the carrier better revenue margins on the equipment, and improves the bottom line even with the discounts that get applied to service.

source: FierceWireless

34 Comments
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posted on 12 Jun 2014, 19:19 9

1. InspectorGadget80 (Posts: 6116; Member since: 26 Mar 2011)


That's a lot of B.S. from AT&T next thing VERIZON SPRINT ect will raise their prices. Bunch of greedy turds. Good thing i left before that started

posted on 12 Jun 2014, 22:53 2

20. CellularNinja (Posts: 295; Member since: 27 Sep 2011)


Gotta love Legere's tweet.

posted on 12 Jun 2014, 19:23 3

2. mrblah (Posts: 390; Member since: 22 Jan 2013)


What a rip, money hungry pigs! Doesn't matter, I will call in and get them waived like every two years.

posted on 12 Jun 2014, 19:39 2

3. PapaSmurf (Posts: 7291; Member since: 14 May 2012)


John's tweet tho!

posted on 12 Jun 2014, 19:41 4

4. Droidrapist (Posts: 186; Member since: 28 May 2014)


All the companies are trying to do away with subzidized device pricing, but AT&T is the most aggressive about it. Their first step was not paying their own employees for 2 year contracts anymore. The second is to screw their customers. Not suprised AT&T is a buncho douche bags.

posted on 12 Jun 2014, 21:25 2

11. networkdood (Posts: 6244; Member since: 31 Mar 2010)


...not paying their own employees for 2 year contract? ok, explain that...thanks

posted on 14 Jun 2014, 11:27

34. ZayZay (Posts: 555; Member since: 26 Feb 2011)


From what I have heard, Corporate store employees don't get paid on upgrades when it is a 2 year agreement. I am part of an authorized retailer company and we get paid less then ever before on 2 year upgrades.

posted on 13 Jun 2014, 10:35

26. CellularNinja (Posts: 295; Member since: 27 Sep 2011)


Droidrapist your comments make no logical sense.

posted on 12 Jun 2014, 19:41 3

5. corporateJP (Posts: 1515; Member since: 28 Nov 2009)


And so it begins...

posted on 12 Jun 2014, 19:41 2

6. dontneedtoknow (Posts: 135; Member since: 17 Feb 2014)


Or you can get a phone through Costco! No activation fees. The crappy thing is that they don't sell iPhone's.

posted on 12 Jun 2014, 19:44 4

7. patroni0 (Posts: 9; Member since: 26 Mar 2012)


to hell with you AT&T, I am sure the rest will follow, greedy disgusting companies

posted on 12 Jun 2014, 20:05 7

8. Mxyzptlk (Posts: 3211; Member since: 21 Apr 2012)


A Fee & Fee

posted on 12 Jun 2014, 22:15 1

16. PapaSmurf (Posts: 7291; Member since: 14 May 2012)


I see what you did there.

posted on 13 Jun 2014, 05:14

23. alrightihatepickingusernames (Posts: 296; Member since: 29 Dec 2013)


Not bad.

posted on 13 Jun 2014, 11:30

27. 1ceTr0n (Posts: 501; Member since: 20 May 2012)


You win the internet

posted on 12 Jun 2014, 20:24 3

9. Planterz (Posts: 532; Member since: 30 Apr 2012)


Activation fees are such bulls#!t, especially when you're committing to a 2 year contract. Thats about $2000 or so, minimum. The companies should be happy enough with that, but I guess if they can squeeze another $35-40 out of each customer, they're gonna get every last drop of milk from that stone.

posted on 12 Jun 2014, 20:26 2

10. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


A nice little 10% boost in activation fee revenue, just in time for the iPhone 6 upgrade wave.

posted on 12 Jun 2014, 21:25 2

12. networkdood (Posts: 6244; Member since: 31 Mar 2010)


AT&T wants everyone on the Next program - it actually makes more money for them...

posted on 12 Jun 2014, 22:17

18. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


Of course it does. When does a duopoly telecom introduce a plan that makes less money for them than the plan before it?

I know with my subsidized unlimited data plan, it is hundreds of dollars cheaper to go with an upgrade and two year contract vs. pay full retail for a phone and then get a piddly plan discount. It's obvious that ATT wants these older plans to go away... but due to the crazy prices of the new phones, isn't quite ready to axe them completely.

posted on 12 Jun 2014, 23:18

21. Doakie (Posts: 1093; Member since: 06 May 2009)


How much do you pay monthly? We moved to AT&T in October; 4 lines with 10 GB shared. It was $260 per month and we paid subsidized pricing for each phone. Then they allowed us to switch to the non subsidized plan for $160/mo in February. Save us $100 per month for doing nothing? Hell yes! Thanks AT&T! $100 x 2 years = $2400. Pretty awesome because we're buying unsubsidized Nexus, Motorola, Huawei, or OnePlus phones going forward...

posted on 13 Jun 2014, 00:37 1

22. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


I pay $66/month after taxes/fees for a single line plan with unlimited data. So it's not really an apples-to-apples comparison if we compare this to your family plan.

If we try and compare looking at data only, if we took two of your lines at 2.5GB data each, that would 5GB for $80 unsubsidized. Just looking at data and ignoring that you have two phone lines vs. one, that's not really a great deal considering I am getting a $450 subsidy over two years and paying $14/mo less.

posted on 13 Jun 2014, 12:58 1

29. Doakie (Posts: 1093; Member since: 06 May 2009)


Well we could always break it down all the way to one line. And do note I would have taken unlimited data if they still offered it. Our plan is $185 per month after taxes. $185/4 lines is $46.25 per line after taxes and fees. That's a $20 difference per month between your plan and mine. $20x24=$480. A full price GS5 is $650 - $200 subsidy price = $450 difference. +$40 for device upgrade fee for subsidized phones the difference between buying it outright vs taking subsidy is $490 over two years. Pretty much a wash, but I would keep the unlimited data if I were you. I know our plan technically leaves me with 2.5 GB of days per month but the other three people on the account spend all day near Wi-Fi at their works so I get all 10 GB to play with. I generally only use 5 GB per month and I don't really cut back my usage except that I don't download Torrents any more like I did on Sprint. Either way, I was just pointing out that there are AT&T plans that are comparable in price to yours after your comment of "I know with my subsidized unlimited data plan, it is hundreds of dollars cheaper to go with an upgrade and two year contract vs. pay full retail for a phone and then get a piddly plan discount."

Right about now I wish I had moved to AT&T a couple years so I could have been grandfathered. But I stuck with stupid Sprint believing all their lies about how great their network would be. I left as soon as I got fed up with empty promises and their 50 Kbps download speeds.

posted on 13 Jun 2014, 22:33

32. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


Sorry to hear you got stuck with Sprint. I used to have a remote mobile access site that used Sprint and it worked pretty well. Better than Verizon at the time. But sometime around when Sprint got into WiMax and Nextel, things started falling apart for Sprint. I dumped everything I had that depended on Sprint and switched to Verizon.

I'm going to stick with my ATT unlimited until they kill it off. The ATT network is many years ahead of what T-Mobile will ever have. The only real downside to ATT is that their phones are getting more and more locked down.

posted on 12 Jun 2014, 21:34 1

13. MelvinPainter (Posts: 49; Member since: 05 Apr 2012)


I got rid of ATT wireless four years ago when they kept bumping up their prices. I just got rid of ATT DSL and got Comcast Internet (28.5 mbps average) for $29.99 a month. Going to dump my landline and use the Ooma tomorrow. They got so big that they now treat the customers like crap.

posted on 12 Jun 2014, 22:16 1

17. PapaSmurf (Posts: 7291; Member since: 14 May 2012)


I get 105mbps with Comcast.

posted on 12 Jun 2014, 22:09 1

14. joe1blue (Posts: 77; Member since: 25 Jul 2013)


they no longer have the pressure from being contested, this is sad blame the officials from way back that allowed Cingular to merge with at&t and sprint merge with Nextel... and every other big company merger with the other big company! They have no pressure if they raised their prices up to $70 instead of $40 there is nothing we can do about it lol.

posted on 12 Jun 2014, 22:10 3

15. lorenzattractor (Posts: 56; Member since: 27 Apr 2012)


I'd like to know exactly what is it exactly that they're activating with this fee.

posted on 12 Jun 2014, 22:19 2

19. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


They are activating the "record revenues" quarterly report.

posted on 13 Jun 2014, 07:37

24. EnigmaticPsychotic (Posts: 13; Member since: 26 Nov 2013)


If I remember correctly from when I was with AT&T, this makes it $40 for an activation now.

posted on 13 Jun 2014, 08:11

25. Tuxedo (Posts: 109; Member since: 19 Mar 2013)


Another reason to go off-contract!!!

posted on 13 Jun 2014, 11:43

28. moronman66 (Posts: 159; Member since: 09 Jan 2012)


It's more to push people to Next because next has no activation or upgrde fees

posted on 13 Jun 2014, 13:36 1

30. Evilsj (Posts: 10; Member since: 03 Dec 2012)


As an AT&T Employee, this is how it was explained to me. They're raising the Act fees of 2 year contracts because they don't want people to do those anymore. They want to make NEXT look like the better deal, which honestly at this point it really is. Wouldn't surprise me if they increase it to $60 if people continue to do the 2 year activations.

posted on 13 Jun 2014, 17:40

31. 0xFFFF (Posts: 1980; Member since: 16 Apr 2014)


This make sense. The ATT accountants probably consider the activation fee as a reduction of the phone subsidy for a two year contract.

posted on 14 Jun 2014, 07:33

33. JunitoNH (Posts: 834; Member since: 15 Feb 2012)


The mobile space gets more interesting, it seems every quarter. Carriers trying to squeeze a little more green out of our pockets. Let me Not, throw those flip phones away yet.

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