New fee for 4.7 million Cingular customers

This week, Cingular announced that starting in September, its 4.7 million subscribers who are still using the company’s TDMA or analog networks will have to start paying a $4.99 per month fee. Cingular claims that this fee is being applied to compensate for the higher per-subscriber costs to maintain the old TDMA and analog cellular networks.

In addition, Cingular plans to turn off their TDMA and analog networks in early 2008 and wants to give its “legacy” subscribers a not-so-subtle incentive to switch to a phone that uses the company’s GSM network. Unfortunately, company spokespeople have stated that subscribers who wish to upgrade in order avoid the fee will have to sign a new contract. Why is this? If a subscriber is willing to pay for the full upfront cost of the new phone that will be needed to use Cingular’s GSM network, why should they have to switch plans and probably be forced to pay more money per month? Why can’t their existing plan simply be transferred to the new GSM handset? “This is a sad way to treat subscribers who have stuck by Cingular for years,” said TRAC Research Associate John Breyault. “Subscribers who switch to a GSM handset will likely have to pay for a more expensive monthly plan, so this action just comes across as a way for Cingular to extract more money from its customers.”

Source: Telecommunications Research and Action Center. http://www.trac.org