In a previous blog entry, I questioned why wireless
carriers allow sharing of voice minutes with no additional charge for multiple handsets, but new data sharing plans add surcharges for each additional device. Subscribers incur no recurring fees for multiple
device access to voice minutes even though carriers incur higher signaling costs
when additional devices are on, even if they are not being used. Carriers similarly incur such costs for
smartphones, and I have seen no evidence that the costs are higher for data
than voice.
So
why the difference? As best I can
determine the answer is that consumers have become inured to billing line item
expansion. We see it everywhere: airfares,
mortgages, car purchases and even car repair.
I will not do business with auto repair facilities that tack on an
additional 10% “shop fee” to the bill, but I seem to stand alone.
What
ever happened to companies having to absorb overhead? Instead we get nickled and dimed by additional
line items that make no sense: “adjusted dealer markup,” “shipping and handling,”
“dealer prep,” “regulatory fee,” etc.
Wireless
carriers can charge for multiple device access, because they can praddle on
about how multiple devices increase signaling and polling costs. The carriers had to absorb such overhead for voice,
perhaps because of a real or perceived need to enhance the value proposition of
their service. As the Internet
diversifies and offers ever increasing options and utility, wireless carriers
can capture greater profits simply by providing the essential first and last
link.
Bottom
line: wireless carriers are in an increasingly better position to raise monthly
subscription costs while reducing the amount of handset subsidies.