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Why cell phone bills are on the rise

People who may have noticed that their new or old cell phone bill has increased over the last year had better get used to it, according to those in the know.  With the demand for wireless services soaring, carriers have to make massive investments in order to keep up.  Carriers have two options in order to do so, either get more wireless spectrum in order to give them more bandwidth or upgrade their network technology.  The problem is that both of those approaches cost billions of dollars, expenses that then inevitably are transferred to the customer.

“The insatiable thirst for mobile broadband is going to force us all to pay more,” says PricewaterhouseCoopers partner Dan Hays.  “Phone bills are going up,” he added. The increase is already underway, with a $5 price hike across the board having been instituted by AT&T last month, and Sprint having increased its monthly smart-phone rates a year ago by $10.  Carriers are also looking at other ways to rake back the cash, with early termination fees having doubled at AT&T, Sprint and Verizon over the course of the last two years.  AT&T also increased its upgrade fee in January, while AT&T put a stop to their lower-tier texting plans last August and Verizon last year dropped its New Every Two discount plan.

Some of the providers are also trying to cut costs by containing consumption, a move that has proved controversial with many users.