Wednesday, June 29, 2022

Verizon Increases Administrative Fees for Postpaid Plans

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Shreya Christina
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Many Verizon customers will see a few extra dollars on their next phone bill. As of June, Verizon will increase the administration fee it charges postpaid customers by $1.35, bringing it to $3.30 per voice line. The rate increase only applies to voice lines – for example, if you have a data-only line for a tablet, nothing will change.

In an email to The edge, company spokesman Adria Tomaszewski did not name a specific reason for the price increase on consumer accounts:

From time to time, we review and adjust fees to cover some of Verizon’s administrative and telco expenses and costs of meeting regulatory requirements. To that end, Verizon Consumer will be making a change starting in June.

Really clears things up! The company will also add a new “Economic Adjustment Fee” to some business accounts from June 16. That’s a monthly fee of $2.20 per line for each smartphone and data device and 98 cents for each basic phone and tablet on an account. Verizon is a little more explicit about the reasons for this new charge:

The current economic conditions affecting businesses around the world continue to increase and despite our efforts to mitigate the further impact, we intend to offset some of these costs by introducing an economic adjustment surcharge.

Verizon is certainly not alone here. AT&T charges its own administration fees on bills and has filed a class action lawsuit in California so it can continue to charge customers. AT&T also recently raised prices for some older plans, and CEO John Stankey alluded to price increases the industry experienced during the company’s latest earnings call. Verizon CEO Hans Vestberg also cited “various types of cost adjustments” and price changes as options to fight inflation during the company’s Q1 2022 investor call.

Verizon also revealed during the call that, despite a 2.1 percent year-over-year increase in total sales, net income fell by 12.4 percent. Raising an ambiguous monthly fee could be one way to address that shortfall. In reality, another class-action lawsuit in California claims that Verizon is using this fee to pad its margins without overtly raising subscription prices. Maybe those big checks it wrote out at the C-band auction last year are catching up.

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