It may not apply to all areas, but here in Northern California, AT&T has informed customers of 32% average price increases effective 1/21/07. In particular, Caller-ID is going up 29.5% to $7.99 per month. Their WirePro service is going up to $3.99, a 33% increase.

AT&T’s plan asppears to be to drive customers to their bundled offers. By raising the prices of their unbundled services, they hope to make their bundles appear more attractive. One wonders if it will simply drive customers away all together.

In my case, I was paying $22.60 per month for basic services:

    Flat-rate local service        $10.69
    Busy call-forwarding             2.75
    Caller-ID                        6.17
    WirePro                          2.99
    Total                          $22.60

I’ve been meaning to change these services for some time, but it’s a pain to call the phone company. Had they not annoyed me with this attempted trick to get me to switch to their bundle, I would have probably quietly kept paying for the above. However, AT&T’s “promotion” was the incentive I needed. I’m switching to the lower priced local service and ditching the WirePro. So my new charges (after the 1/21/07 rate increase) will be:

    Measured-rate local service     $5.70
    Busy call-forwarding             3.99
    Caller-ID                        7.99
    Total                          $17.68

Had I done nothing, my new bill would have been $26.66. The AT&T promotion includes an offer of a $26/month bundle of the services I had, plus up to 13 calling features. They hype this as a “savings of more than $38/mo. - if you were to purchase these services individually!” I’m sure a lot of people will switch over to this, believing they are “saving” money (by increasing their bill, go figure)

In my case, this promotion did just the opposite. I felt like they were holding my feet to to fire, threatening me with a “get this bundle or else” message. So instead of AT&T getting an additional $4/mo. out of me, they are getting almost $5/mo. LESS. That amounts to a $108 reduction in their annual revenue from this subscriber, enough to pay for a PhoneGnome box (even when they aren’t on sale) or a heck of a lot of calling minutes.

One has to wonder what the net effect of this AT&T promotion will be. Will it cause others to look at their options, as it did for me, or will most people just bite the bullet and pay the fees.

This seems like an odd time to be raising landline rates in the midst of talking about “supporting competition” in the context of the Bellsouth merger “conncessions” and with the supposed rapid loss of lines to mobile and VoIP.

This entry was posted on Wednesday, January 3rd, 2007 at 4:58 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.