Check out the Dell Store on CNETOn Call: T-Mobile's unfair upgrade fee
The MyTouch 3G: it will cost you.
(Credit: Corinne Schulze/CNET)Despite what you might think, I don't believe all cell phone carriers are evil. Like any big faceless corporation, they're not always going to get it right, but I'm confident that carrier execs don't just plot to screw the customer.
Yet, every so often something happens to shake that confidence. On Sunday, I accompanied a friend to the main T-Mobile store in San Francisco. He's been waiting for weeks to finally ditch his clunker Nokia 6133 and upgrade to the MyTouch 3G. As a five-year T-Mobile customer who had been off contract for three years, he was ready to sign a new contract and agree to a more expensive monthly plan with data.
We were greeted by a friendly T-Mobile sales rep and our buying experience proceeded smoothly as my friend picked out his data plan, signed the new contract, and activated his MyTouch. Just as he pulled out his card, however, the trouble started.
The rep announced that he'd have to pay an $18 "upgrade fee." Uh, pardon me? I broke in and asked why a long-time customer who was signing a new contract and was agreeing to a costlier monthly plan was subject to the fee. With a smile and a relentlessly cheery demeanor she replied that she didn't know, but that he'd have to pay it anyway.
My beef with the upgrade fee is two-fold. First off, it should be waived for customers like my friend. He had only purchased two phones during his entire five years with T-Mobile so he was eligible for an upgrade. But now he's charged for being eligible? Wireless carriers hate customer churn, so I can't grasp why T-Mobile is charging a customer to not jump ship to another carrier.
Secondly, the fee is nothing more than a way for T-Mobile to make some cash. While supplying a phone and offering service to customers costs T-Mobile money, I don't understand the inherent cost of moving a customer from one phone to another. As I see it, the fee is all about helping T-Mobile's bottom line, but isn't my friend doing that already by remaining a customer?
When I contacted T-Mobile for an explanation, a spokesperson responded that the upgrade fee helps the carrier offer great value in its device and rate plan pricing. I appreciate the response, but I couldn't disagree more. Loyal customers should be rewarded for remaining loyal, not charged for it.
Kent German is a senior editor for cell phone reviews at CNET. When he's not testing the newest handsets on the market, he's blogging about cell phone news for Crave. In his On Call column, he answers reader questions and gives his take on the rapidly changing mobile industry. E-mail Kent.
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T-Mobile will get it right someday. If not, Android should be well disbursed by then to offer a choice of carriers.
I agree that it should not have to be paid considering that both dealers and the telecom companies themselves are already making quite a hefty profit from post-paid wireless business.
The fees can be removed. However, you must first sign the contract agreeing to pay the amount and then contact your carrier's customer service number where their CSRs will usually remove the fees. More helpful associates and managers will do this for you.
In response to Forked_Tongue, I have a friend who used to work in what I would assume is general customer service and got promoted to technical. Him and I usually speak about the difference between telecom carriers as we're both in the same industry. Like I said I worked as a manager, then DMC for Radio Shack and I now world as an RSM for Metro PCS. I have been fortunate enough to meet several people within the industry including my reps while working at RS and master franchise owners where I am currently employed.
T-Mobile's customer service is abysmal as well as they're criteria for meeting certain customer service escalations, such as your retention department.
The United States' wireless telecom industry has always been the odd ball out in that we sign 2-year contracts with our carriers and receive a lower price on our devices, where as in Europe every company is no-contract and full price is paid for the device, similar to how we purchase a computer but then choose which Cable, DSL or Satellite broadband internet carrier to sign up with. They will nickel and dime you and it's become the only way to break a profit with such stiff competition floating around. However, I am always one to believe (and perhaps it's been the way that I have grown within my industry) that customer service represents the highest value.
Will you go with the cheaper company with little to no customer service? That doesn't really care if they retain you as a customer as increase their overall profit margins? Or will you go with the more expensive company where you get great customer service, where your problems are resolved, and where they will work with you, given you are a loyal customer? I will always pick the latter. In the GSM battle the former is T-Mobile while the latter is AT&T. This comes from personal experience with both carriers as well as endless customer support situations in which I've had to intervene as a SM, DM and RSM.
No-Contract services are lowering their prices and competing against each other when it comes to unlimited minutes, text and data, sometimes pay-per-use. These services ultimately don't affect the post-paid market as they cannot compete in terms of speed, reliability and overall cost, not to mention device options. Metro PCS, Boost and Virgin Mobile, to name a few, have gone after the "unlimit yourself" strategy.
My experience with T-Mobile has always been a negative one, although I must admit I have dealt with them only as a consumer when calling on behalf of my grandfather who has an older plan, therefore it is not economically productive for him to switch carriers. My issues have never been 100% resolved. As a dealer I have dealt with shady business practices and lack of business ethics in general.
Complaining a month later at the store when my wife's new phone died due to a defect, I was told it is to pay for the backoffice paperwork of changing the account around. It probably takes 5 minutes for the data entry so that excuse didn't float with me. It's just plain fee gouging because they can.
http://www.cnet.com/8301-19736_1-10305703-251.html
I just got a direct mail piece (yeah, snail mail) from Sprint telling me I could have music downloads or a $25 credit or something for referring a friend to their service. This got me on 2 levels... Why would I download music from the Sprint music store? Why are wireless carriers even in the music business? (get out, you're wasting your time)...
Refer a friend for just $25 off my bill? That isn't really appealing. I have more minutes than I know what to do with and unlimited data. $25 is a drop in the bucket. Why don't you pay my bill for 2 months... 3 months. Then, maybe, I'll bug my friends and ask them to switch to your network, but you also have to get some better phones. I mean, yikes.
The wireless industry has a long way to go before customers will be happy with their service but first I think they need to realize exactly what it is that they do.
I think at times it is customers that ask too much of their carriers.
As far as the music industry goes, it's more about convenience. Many customers will download music onto their MicroSDs and play it from there, having already purchased the music and it being stored on their HDDs. However, for many users it is simply a matter of convenience. Perhaps they do not know how to get music on their MicroSDs, perhaps it's too big of a hassle, perhaps they do not own a PC! For these customers, the option exists to download the music, games, ringtones, etc from the carrier's online store, enabling them to receive a decent profit as well.
You cannot be serious, I truly hope your sarcasm is so dry it is simply over my head. Customers expect ask too much? Why am I reading stories about the U.S. having the highest monthly costs for cell usage? Why are providers allowed to collude to jack up text messaging rates when the actual texts cost them nothing? Why are they allowed to double-dip (charge for incoming and outgoing calls/texts) when that sort of behavior isn't even allowed in 3rd World dictatorships?
Telcos have been putting the screws to the American consumer for far too long and it's about time somebody fought back.
The text messaging "double-dipping" has been a controversial subject for many years and is unfair.
What we must understand about our current telecom business is the fact that profits are not always received in what consumers would identify as the proper place. As I mentioned in a previous comment, telecom businesses are run very different across the globe. Here in the US we offer discounts on devices when signing a long-term contract. However, sometimes these discounts are set up as traffic drivers in order to increase the amount of new contracts being signed with the carrier. Profit is then derived from add-on services like SMS and Data.
I am simply offering you the corporate view on issues relating to consumer troubles. I am neither say they're nor correct nor fair. I am offering explanations to how the cost is derived and broken down within the industry in order to realize a positive profit margin. I do not represent any of the corporations being discussed, at the current time.
I didn't mean to imply that you were working for any of the telcos. Your comment does make a lot of sense and does show a lot of the American mentality. It seems we'd rather put ourselves into debt for the next x number of years (cell phones, cars, homes) and get a new shiny object immediately than to wait until we have the money to do it correctly. Very good and enlightening series of posts, I appreciate the insight since I only have a basic understanding of the telecom industry.
How many times have you upgraded within the 4 years? Certain circumstances (you purchased your own handset, a business account, requesting a waive, or your a primer customer) or you don't pay the fee. Ask sprint if they charged you the fee, you be surprised how many wireless customers don't pay attention to their fees, unfortunately, Sprint hides them very well, sometimes due to a billing error we waive them entirely.
If you live in the east coast, you will be charged an activation fee. Call up customer service to waive it.
Just a thought: Maybe the $18 charge is to pay for the campy/awful MyTouch3G launch event?
"Sure, but first you have to give us $18, before you can give us the $150."
Love T-Mobile, except this nonsense. Just keep calling and getting different customer service people until you find one who will waive the fee. That's what I did.
Well, late in July 2009, I've decided that I'll get another 6133 phone for free with another 2-year plan. Turns out, T-Mobile didn't offer it, so I had the option for Nokia 7510 for $50. I figured why not, and also get another one for my wife just in case either of our 6133 breakdown in the next little while.
As it turns out, I was greeted by the $18 upgrade fee for each of the phone ($36 right there), plus another $8 (or so) per phone for ground shipping. After all said and done, I would be out for additional $52 (18 x 2 + 8 x 2) in addition to the $100 for each phone (before the $50 mail in rebate from Nokia). I asked the rep on the phone if she would wave the $18 fee... but she insisted that everyone has to pay it.
While talking to her, I checked out eBay and found several new 6133 phones for $70-$80. About the same if I was to upgrade with 7510 phone. My wife and I decided not to upgrade the phones, and simply hold off until one of our 6133 models would break down. That $18 really turned both of us off.
In the mean time, after I lowered my family plan to only 1000 minutes for some $70, I discovered the following day that T-Mobile is offering their customers $50/month for unlimited service + $40/month for the 2nd line. That would be $90 for both lines, and when I called T-Mobile, I asked why I wasn't told about this "loyalty" plan. The next rep apologized and said that I could switch to it without any 1 or 2-year contract. So I'm happy from that stand point.
But still, I've noticed recently that their $5/month per line in texting was REDUCED from 400 to 300. ***? Texting uses fraction of the bandwidth that regular calls make, and aside from being ripped off on the costs of texting, they increase the prices behind the scenes. I'm sure their excuse is, "well everyone else is doing it".
This... "everyone else is doing it" would probably be something that the wireless CEO's get together over the weekend each month and decide how to collectively rape the customers. Sad...
Also... while I'm venting... what ever happened to the Billing by the Second? We used to have this in Canada, but by 2002 or so, all the major carriers begun to shift to Billing by the Minute. Not sure about the US... (as I moved here 2-years ago). But anyways, the billing by the minute is another way of raping the customer, aside from their 9pm to 6am "evening" hours. Yeah, I can imagine all the people who are waiting to use their cell phones at 9pm to begin talking to their friends. Seriously... both the billing by the minute and the evenings need to change.
Fortunately, with the unlimited plan that I got... I don't need to worry. But the industry in itself should improve upon it. Sadly... it's all about the money and ways of gouging the customer.
"Kent German is a senior editor for cell phone reviews at CNET. When he's not testing the newest handsets on the market, he's blogging about cell phone news for Crave. In his On Call column, he answers reader questions and gives his take on the rapidly changing mobile industry" This is Kent German's bio.
Your honestly telling us you accompanied a friend to upgrade his phone and you were unaware of the activation fees? Every carrier charges this fee, even the pre-paid industry charges a fee when activating new handsets. For someone who works with cellular phones almost every day and supposed expert in the mobile industry was unaware of this fee, it doesn't make much sense to me.
Sure the fee isn't fair, in your friends circumstance it should of been waived. Are 18 dollars enough to lose a customer? Yes. I've seen little fees like this lead to churn all over wireless. Its the responsibility of the rep and the company to provide a service to justify that fee, a lot of reps don't even disclose the fee. I don't think this should have shook your confidence in the wireless industry, companies are RUN to make money, every way they can. Customer experience doesn't come free, neither does getting a new phone on your account.
Dialed In has always been a resourceful guide to wireless information and how the companies are being run. This really is just a rant that should of been written years ago when the fees were first being applied, written somewhere on a blog. Not here Kent.
Yes they are in busienss to make money. What's wrong with charging a fiar price for the service and the phone and not having a fee on top of what is presumed to be a fair price? Nothing. What's wrong with a fee? A lot. Starting with it allows them to hide the true cost of your service when you comparison shop.
I left them for another carrier that charges more, and I'm glad I did.
While I'm sure they skirt the line of actual criminality assiduously, as their kind always does, my experience with them subjectively felt like one stick-up after another. They couldn't be worse if they tried.
Instead, I went with AT&T. I got a completely screwed up bill from them the first month, but that was due to the sheer incompetence of Best Buy and not AT&T. Knock on wood, AT&T's network has been fast, and their customer service has beeen decent, although still not at the level of T-Mobile. And yes, I did get an iPhone 3Gs.
The one thing about T-Mobile is that if you try to get out of a contract, there's no way they'll let you do it, even if they admit that they don't have coverage in a particular area. Their phones also suck - the MyTouch is just not ready for primetime and if you don't want a Blackberry, you don't have a lot of options for smartphones.
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August 12, 2009 5:51 PM PDT
- hey all I had to pay this ugly fee also,what a way to get rewarded ...............DUH!!!!
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