Leak Memo Points to AT&T Hiking Device Upgrade Fees

Posted by at 11:47 am on February 12, 2012

A staff memo has leaked plans for AT&T to hike its device upgrade fee. The BGR copy had the cost jumping from $18 to $36. The cost was allegedly necessary because the “overall costs” for upgrading to a new device had gone up, AT&T said.

The fee increase would take effect February 12. AT&T hasn’t separately confirmed the change.

AT&T’s price difference doesn’t necessarily put it dramatically out of line with other carriers, but it does raise the effective price in those situations where the upgrade fee can’t be waived. Most US carriers charge an upgrade fee that’s ostensibly to recoup administration and the possibility of a return, although this has been doubted by critics who see it as padding and masking the real cost.

The hike is supported by a large shift towards smartphones that ups the initial subsidy hit AT&T has to take. Some devices, such as the imminent, $300 Galaxy Note, are pushing the overall phone costs upwards. A link between the price increase and fallout from the failed T-Mobile merger is doubtful given the infrequent nature of device upgrades and the small amount relative to monthly plan revenue.

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