AT&T is apparently trying to pay for its acquisition of Time-Warner by raising the amount of the “administrative fee” that it charges its 64.5 million wireless customers. The move will earn the company an extra $800 million or so every year.
The fee hike was first noticed by BTIG Research analyst Walter Piecyk (via CNBC), who pointed out that AT&T has increased its monthly fees by approximately $1.23 in 2018 with two price hikes in April and June. Customers are now paying $1.99 in administrative fees, up from 76 cents last year.
The fee hike will affect around 85% of the carrier’s customers. The administrative fee apples to all postpaid accounts. Prepaid users are not required to pay the admin fee.
Until the recent hikes the fee had stayed reasonably steady since it’s first appearance in 2013. It had taken several years to see it go from 61 cents to 76 cents over several years. And, then AT&T kicked the fee increases into overdrive.
Piecyk believes the free increase could be an attempt to offset the additional debt AT&T recently took on when it bought Time Warner for $85.4 billion. “Presumably the Administrative Fee is another way to help AT&T fund its network build and Time Warner acquisition going forward,” he says.
However, AT&T said, in a statement to CNBC, that the fee is standard in the wireless industry. “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.”
