‘Admin fees’ just a sneaky way of raising rates?

Written by on July 2, 2013 in BillingViews, Opinion with 0 Comments

This is the sort of headline normally reserved for cut-price airlines, hotels and some financial institutions. Sadly, however, CSPs have succumbed to this lowest form of revenue gathering and even though they may garner a few extra dollars, the PR it generates when exposed, is far from favourable.

Up there with ‘bill shock’ as the quickest way of getting attention of the press, extra charges on bills that have no name, are not only being picked up by wary customers and vigilant journalists, they are being publicly exposed and commented on.

The latest ‘big’ operator being singled out for special attention is AT&T, but all four US major US mobile operators are ‘guilty’ of some sort of ‘below the line’ charge that is tacked on to the bottom of bills with taxes.

These fees are not considered part of the service fee that wireless customers pay each month and are definitely not fees levied by government. So what are they and why are they listed anonymously? They are almost as insidious as ‘no-frills’ airlines adding fees for seat selection, credit/debit card transactions, online booking fees (when there is no other choice) and fuel surcharges. One would have thought seats and fuel should be included in the price at the very least.

Ryanair’s CEO once suggested even charging for the use of toilets on board but after French actor, Gerard Depardieu relieved himself in the aisle of an Air France flight Ryanair probably had second thoughts. It is likely that in future they may dispense with toilet tissue so passengers will either have to carry their own rolls on board or pay or pay for them mid flight.

You can easily see how extras charges can ‘fly’ out of proportion if not clearly understood by customers, or are clearly justified. Might we see a time when mobile operators start charging for electricity to run the network, something like a ‘power’ surcharge?

Mobile operators say the admin fees are used to cover additional operational costs, such as expenses related to running their businesses and most have provision for these added charges in their terms & conditions, but who ever reads those? It is very difficult to increase a monthly subscription fee in a two-year contract so adding these little extras seems to be an easier route.

Although they may be perfectly legal this does not make them any more palatable. Customers expect operators to absorb extra costs during a contract term, not pass them on as an admin fee. The operators might get away with being more honest and calling them ‘lousy management fees’ or ‘executive salary surcharges,’ but then, maybe not.

Regardless, when CNet ran the story over 100 mostly disgruntled customers vented their anger online and probably had every reader going to check if they, too, were being hit with superfluous admin charges. I’m sure we, as an industry, can be a little more creative – hopefully without having to increase costs. Maybe those clever marketing people can come up with something? How about a ‘special marketing fee’ to cover all those brilliant promotions and campaigns they keep coming up with?

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .

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