Menu Menu

Raising Rates --- Without Raising the Price

Sneaky..sneaky...sneaky. The wireless carriers, particularly Verizon and Cingular, have done two things recently that will increase their average revenues per subscriber, even though they didn't actually go out and announce a price increase.

1) Many of the local/regional rate plans have been done away with; the carriers are almost exclusively offering national plans. Many consumers like these plans because they offer more price certainty (i.e., no roaming charges). However, most people never travel with their phone, so forcing people to national plans is a price increase, because a national plan offers fewer minutes than a local plan for the same dollar amount.

2) While funneling subscribers to national plans, the carriers have also reduced the number of these plans. For example, where Cingular and Verizon used to have $39.99, $49.99 and $59.99 rate plans, they have now done away with the $49.99 one. If you buy the $39.99, but blow through your minutes, you'll have expensive overage charges. Sign up for the $59.99 plans, and you're on the hook for $720 a year. Again, the net effect will be higher bills.

Section: