In context: An extra $0.51 per month, or $6.12 annually, is hardly enough to get your feathers ruffled over but at scale, it generates a lot of additional income for Sprint. Given T-Mobile's recent bid to acquire Sprint, however, it could be a moot point in the near future.
AT&T earlier this year quietly increased the administrative fee charged to most of its wireless customers in the US. The nation’s second largest wireless carrier was heavily criticized over the matter although most assumed the move was done to help finance its recent acquisition of Time Warner.
It has since come to light that AT&T isn’t the only one jacking this line item.
Users on Reddit say the line item fee climbed from $1.99 to $2.50 per month, an increase of nearly 26 percent. When applied to Sprint’s more than 30 million post-paid wireless customers, the elevated fee could generate nearly $200 million in additional annual revenue for Sprint.
The administrative charge is explained on Sprint’s website as follows:
The Administrative Charge is applied per line, per month by Sprint to help defray various costs incurred by Sprint, including, but not limited to: charges we, or our agents, pay local telephone companies for delivering calls from our customers to their customers; fees and assessments on our network facilities and services; property taxes; and the costs we incur responding to regulatory and legal obligations. The Administrative Charge appears as a separate line item under Sprint Surcharges of your invoice. This charge is not a tax and is not an amount we are required to collect from you by law. The Administrative Charge and the components used to calculate this charge are subject to change from time to time.
T-Mobile last year embarked on a campaign to roll hidden fees and taxes into its advertised rates. Verizon defines surcharges as follows:
Verizon Wireless' Surcharges include charges to recover or help defray costs of taxes and of governmental charges and fees imposed on us, including a Regulatory Charge (which helps defray costs of various regulatory mandates, including government number administration and license fees) and a Federal Universal Service Charge (and, if applicable, a State Universal Service Charge) to recover costs imposed on us by the government to support universal service, and may include other charges also related to our governmental costs. It also includes an Administrative Charge, which helps defray certain costs we incur, currently including (i) charges we, or our agents, pay local telephone companies for delivering calls from our customers to their customers, (ii) fees and assessments on network facilities and services, and (iii) certain costs and charges associated with proceedings related to new cell site construction. Please note that these are Verizon Wireless charges, not taxes that we are required to collect from you. These charges, and what’s included, are subject to change from time to time.