10 Ways, ATandT, Verizon, Other Mobile Carriers Gouge Customers

 
 
By Don Reisinger  |  Posted 2010-01-25 Email Print this article Print
 
 
 
 
 
 
 

News Analysis: Companies such as AT&T and Verizon Wireless might lead the mobile market, but they also lead a group of carriers that force customers into draconian contracts. Carriers are troublesome. They have yet to be stopped. And it looks like things are only going to get worse going forward.

When Verizon Wireless and AT&T announced recently that they were dropping the price of their unlimited talk plans from $99.99 to $69.99 for single plans and $119.99 for family users, some were hopeful that things were changing.  

Instead of gouging customers with plans and fees that practically ensure users will be forced to stay in contracts, some thought that carriers were finally realizing that in order for them to enjoy greater success into the next decade, they need to improve their relationships with individual and corporate customers.

Just a little over a week later, that hope might already be gone. There is some concern in the industry that mobile carriers are considering increasing the amount that they charge for data plans in an attempt to capitalize on the growing number of people who are using data on their smartphones.  

Worst of all, netbooks are selling extremely well in the marketplace. Most of those devices come bundled with available 3G networking. Since customers are required to pay a monthly data fee for access to 3G carrier networks, carriers ostensibly believe that they're raising rates at precisely the right time.

But what about the customers? It seems that more often than not, those people lose in carrier relationships. In order to start changing that for the better, more awareness is needed to fully understand just how troublesome carriers have become. So without further ado, let's take a look at 10 serious problems with major mobile carriers.

1. Customers can't get out

One of the worst aspects of any mobile phone contract is the termination clause. Rather than allow customers out of their contracts, carriers charge exorbitant fees to ensure that customers don't capitalize on a subsidized price and jump to another carrier after getting the phone they want. Charging a fee for breaking a contract is fine. But the fact that customers are charged hundreds of dollars to walk away from a bad carrier is ridiculous. Worst of all, those rates are on the rise.

2. Give and take

It seems that whenever a carrier makes a step in the right direction by dropping the price of a plan or offering solid deals on good phones, they move to increase revenue by an even greater amount in another area of their business. Both Verizon Wireless and AT&T have decided to drop the rates of their unlimited plans. That's great. But if they decide to increase rates on data plans, it seems to fall in line with what carriers have been doing forever: giving a little and taking even more in return.

3. Subsidized pricing models

Subsidized pricing models ensure that the phone a customer really wants is more affordable than it would be if it were unlocked. At face value, that might seem like a good deal. But consider the fact that all those subsidized prices are offered with a two-year plan and customers won't be able to get a new phone at that subsidized rate until their plan is up and it becomes clear that not all deals are what they seem to be. Carriers lure customers with cheaper phones only to levy a hefty fee on them over the next two years.

4. The enterprise loses badly

One of the biggest losers in the world of mobile phones is the enterprise customer. Unlike consumers who can easily get out of a contract if they're willing to pay up, corporate customers aren't so lucky.  



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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