Verizon is raising its Administrative and Telco Recovery Charge by 20 cents per line starting December 18. This change will apply to both voice lines (like smartphones and basic phones) and data-only lines (like tablets and hotspots).

The fee for voice lines will go up from $3.30 to $3.50, and for data lines, it will rise from $1.40 to $1.60. However, this increase does not apply to Verizon’s home internet services. The company says this increase will help cover the costs of running and maintaining the network.

Verizon raised this particular fee a few years ago. The fee basically helps pay for their property taxes and other costs of doing business. That’s normally the kind of thing a company pays on its own because that’s a business expense, but in this case, it’s part of an extra charge for the customer. Other big phone companies like AT&T and T-Mobile also come with fees, but they call them different names and give the same reasons for them.

There are never going to be customers who are happy with a fee increase, even when it’s small. Some could see it as companies raising their profits without clearly announcing a price increase in their plans. This situation is similar to what happened with AT&T, which was hit with a class-action lawsuit in 2022 over a similar fee hike. The lawsuit was settled, so AT&T did not have to admit wrongdoing.

Verizon has about 144 million wireless retail connections, according to the company’s 2024 Q3 earnings report. A twenty-cent increase might seem minor, but across 144 million, it adds up to 2.88 billion cents or $28,800,000. That’s monthly, but in one year, that’s $345,600,000. Most companies would love a yearly increase of $345 million, and doing so without raising a fuss is a huge win for Verizon, but at the cost of customers. Of course, this hike isn’t for worldwide customers, just for those it affects, but this gives a good idea of how profitable small price hikes are.

This is especially important given that Verizon’s net income dropped from $4.9 billion in the third quarter last year to $3.4 billion in the same period this year. So, it seems Verizon is trying to compensate for lost profit which would be smart because losing a billion dollars in revenue is a big deal. The real issue is when price hikes keep coming, 20 cents today doesn’t seem like much, but more hikes over time add up quickly.

Source: Reddit, The Verge