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T-Mobile hikes bill payment fee for Metro prepaid customers

The logo for Metro by T-Mobile.
The logo for Metro by T-Mobile. (Image courtesy T-Mobile U.S./Graphic by The Desk)

T-Mobile will raise a bill payment fee for customers of its prepaid brand Metro by T-Mobile next month, according to a memo circulated to retail store employees this week and reviewed by The Desk.

Starting September 1, Metro by T-Mobile will charge a $5 processing fee when customers pay their bills via telephone or in-person at a retail store. Currently, the fee is $4 for the same feature.

The price hike is the latest fee increase rolled out by T-Mobile in recent weeks. Despite a pledge to not raise the cost of its wireless service plans, T-Mobile has increased little-known surcharges that impact some customers who upgrade their phones, require assistance over the phone or who are late paying their bills. Earlier this year, T-Mobile began charging customers $30 to activate a new account with the company — previously, the surcharge was $10 — though most retail associates and phone agents will agree to waive the account activation fee if a customer requests it.

Officials at T-Mobile say the price increases are intended to help offset rising costs associated with providing customers some of its services. Many services that are available in-store and online — including bill payment — are also available to customers through the T-Mobile and Metro by T-Mobile websites free of charge.

Other fees, including a regulatory telecommunications surcharge, were increased on customer accounts across the board, but only customers who subscribe to lower-cost T-Mobile or Metro by T-Mobile plans actually saw their bills go up.  Both brands have tax-and-fee-inclusive plans where regulatory rate increases are absorbed by the company, but they tend to cost customers more on a monthly basis. T-Mobile’s fee-inclusive plan, called Magenta, starts at $70 a month with AutoPay, while Metro by T-Mobile regularly runs a tax-inclusive promotion where one line of service costs $40 a month with AutoPay.

Earlier this year, a T-Mobile executive brushed off a suggestion from Wall Street that claimed the wireless it could earn more average revenue per user, or ARPU, if T-Mobile raised subscription fees across its plans.

“We found a better way to actually increase ARPU and service revenue, and that is to have customers select us,” Peter Osvaldik, T-Mobile’s chief financial officer, said at a media and telecommunications conference.

Instead of raising fees on its plans, T-Mobile is instead pushing customers to spend more on its wireless service, targeting costlier plans that offer more high-speed wireless data on an account and perks like a free Netflix subscription and in-flight Internet access.

“We expect to still see ARPU growth, but do it through creating value with customers and giving them an exchange of value that they’re willing to pay more for,” Michael Kats, T-Mobile’s chief marketing executive, said.

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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