When shopping for a new wireless phone, remember to consider the costs that carriers charge to activate new accounts and upgrade existing subscribers. Most carriers make a big deal of advertising low-priced handsets, but few do a good job of highlighting the additional fees and charges that can make these cut-rate phone not such a good deal. For example, Cingular and Nextel both charge ?phone upgrade fees? to existing subscribers who want to upgrade their service plans. Consumers should remember to distinguish between ?activation fees,? which are generally only charged on new account, and ?phone upgrade fees,? which apply to existing subscribers who activate a new handset. Here is a breakdown of these fees for the five major national carriers:
- AllTel ? A $25 activation fee applies on all new post-paid accounts. An upgrade fee may also apply when additional lines of service are added to the account.
- Cingular ? A $36 activation fee applies on all new accounts unless the new subscriber is signing up for a FamilyTalk plan, in which case the fee is $26 per phone activated. Note that most FamilyTalk plans include at least two lines of service, so new subscribers should expect at least $52 in activation fees. An $18 Upgrade Fee applies on all accounts, unless the subscriber is upgrading from a former AT&T Wireless phone, in which case Cingular will waive the Upgrade Fee.
- Sprint/Nextel ? A $36 activation fee applies to new service activations, certain plan changes, and handset upgrades.
- T-Mobile ? A $35 activation fee applies to all new service plans. While a separate upgrade fee is not charged, T-Mobile does base its handset upgrade pricing on the length of time the subscriber has been with their current rate plan and the length of time since the last handset upgrade. T-Mobile recommends that subscribers on one and two-year contracts wait 11 and 22 months, respectively, before upgrading their handsets in order to get the best price on their upgrade.
- Verizon Wireless ? A $35 activation fee applies on all new lines of service. Upgrade fees do not apply
When shopping for a new phone or upgrading to a newer handset, be sure to add all applicable activation fees and upgrade fees to the sticker price of a new handset and be sure to ask the sales representative if it's possible for them to waive the fees.
Source: Telecommunications Research and Action Center. http://www.trac.org