AT&T Mobility (NYSE:T) increased the early upgrade fee on its smartphones from $75 to $200 to counter what it said is the growing complexity (and cost) of the devices.
The fee hike, which was first unearthed by the blog Boy Genius Report, went into effect earlier this month. AT&T smartphone subscribers who need to upgrade their phone (due to damage, theft or other reasons) before they are eligible for an upgrade discount must now pay the two-year price of the phone plus $200. An AT&T spokeswoman confirmed the change to FierceWireless.
In an internal AT&T memo BGR published, AT&T stated that "as smartphones become increasingly more sophisticated the cost of these devices has also increased. However, early (exception) upgrade pricing still allows us to provide a price point lower than no-commitment pricing to our smartphone customers if needed." The new changes do not apply to Apple's (NASDAQ:AAPL) iPhone, and the early upgrade fee for feature phone and quick messaging device customers will remain at $75. AT&T also pointed out that even with the new fee, customers wind up paying less than the full retail price of the smartphone.
AT&T representatives did not immediately respond to a request for comment.
AT&T's action has precedent: In May, AT&T raised its early termination fee for smartphones and netbooks from $175 to $325. And in November, Verizon Wireless (NYSE:VZ) announced it would raise its ETF from $175 to $350 for what it termed "advanced devices," which include some netbooks and smartphones.
AT&T CEO Randall Stephenson said at an investor conference in September that the carrier will report a record number of smartphone sales in the third quarter. The AT&T chief added that 53 percent of AT&T's postpaid subscriber base use a smartphone, but he said he expects that number will move toward 80 percent in the future.
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