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August 1, 2006

Cingular To Charge More for Older Tech Phones

Got an older cell phone and Cingular Service?  You might be paying $5 more per month starting this September.  Most Cingular customers are on the GSM network, but a about 8% of customers still use the old TDMA and analog network.  Cingular is stuck with them until 2008 under an FCC requirement that the company support analog users until then.  They would like to shut their TDMA network at the same time. However, when you're a company owned by AT&T nee SBC, make lemonade out of those lemons.  Charge those early adopters but slow upgraders for their (bad) habits.  Cingular would bring in about $23.5 million per month under those circumstances.  That should add about a quarter of a billion dollars plus to the bottom line.  Switching phones to GSM connections avoids the charge.

Cingular says that having to support the older system takes away resources from GSM calls.  It would make sense to for the company to get everyone on GSM.  That would reduce expenses (but not necessarily the standard monthly charges for service) and theoretically improve GSM service for customers.  From the customer  perspective there is a great opportunity not only to upgrade your phone, but possibly your carrier.

Reports are in the Daily Tech, MSN Money, and America's Network.

August 1, 2006 | Permalink


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