Just a few months ago, when AT&T sought approval for its merger with Time Warner, it promised that the deal would allow it to lower prices for consumers. Following the costly acquisition of Time Warner, it looks like the opposite is happening.
AT&T is looking for new sources of revenue and it’s mostly at customers’ expense.
The corporate giant’s first move? To quietly bump its “administrative fee,” currently a line item at the end of a customer’s bill. The fee more than doubled from 76 cents to $1.99, a $1.23 increase, affecting about 85% of AT&T’s 64.5 million postpaid phone lines in service. This fee comes right in time for AT&T’s closure of its deal with Time Warner, and is set to add about $800 million in annual revenue.
But after its $85.4 billion purchase of Time Warner, AT&T is still under pressure. That’s bad news for customers, who are paying the price of this costly purchase. Just a few days after its sneaky administrative fee hike, the corporate giant announced that it is increasing the cost of its streaming service DirecTV Now by $5 per month across the board on most packages.
Prior to the merger, the corporate giant dismissed the Justice Department’s argument that the merger would, in fact, raise prices. According to AT&T’s post-trial brief, “the evidence overwhelmingly showed that this merger is likely to enhance competition substantially, because it will enable the merged company to reduce prices …”
The filing stated that consumer should see price benefits quickly after the acquisition is complete. Ironically, the exact opposite has occurred. Although AT&T claims that these price hikes can be attributed to market forces, it certainly seems like they are looking for more revenue after such a costly merger.