AT&T has increased its activation fees for customers who opt for two-year contracts. The increase is only a couple of dollars, from $36 to $40, but when you consider that you have to pay that for every device, every upgrade, it starts to add up.
The move is part of a larger effort by the carrier to push more subscribers away from the traditional contract/subsidy model, and towards Next. The upgrade program allows customers to get a new device every year for $0 down, and zero fees…
FierceWireless has a statement from AT&T on the change:
“Customers looking for a great value can get it with AT&T Next and Mobile Share Value plans,” AT&T said in a statement. “With AT&T Next, customers can get a new device every year for $0 down, plus no activation, financing or upgrade fees. Customers choosing a 2-year contract plan will experience a four-dollar activation fee increase beginning June 8. Customers on 2-year plans choosing to upgrade to a new device will experience a four-dollar upgrade fee increase beginning June 8.”
These fees have become quite popular with carriers over the years—used as a way to offset some of the costs of subsidizing $700 smartphones down to $100-$200. Verizon charges $35 for activation on two-year contracts, and Sprint charges $36.
But the fees don’t typically apply to device upgrade programs—which most carriers are now pushing. First popularized by T-Mobile last year, these programs allow you to finance the full cost of a phone with little down and a small monthly payment.
AT&T, for example, will allow approved customers to get a 16GB iPhone 5s for $0 down and 20 monthly payments of $32.50. The plan also makes you eligible for AT&T’s discounted Mobile Share data plans, as well as an annual upgrade with trade-in.
The carrier says it expects around 3.2 million AT&T Next smartphone sales in the current quarter.