Is AT&T telling lies?
AT&T (NYSE: T) many peoples beloved wireless provider and new owner of Time Warner, has seemingly gone back on statements it made to lower TV costs for the consumer.
AT&T’s bid to buy Time Warner was approved by a federal judge last month after many argued that AT&T would have too much control and would raise prices for TV packages.
AT&T argued that prices are so high now since they have to broker agreements with third party content makers such as Time Warner to provide to their customers. AT&T’s argument went on to state that by gaining control of more of its own content they would then be able to lower prices for all of it's TV customers.
This week DIRECTV Now customers started receiving emails stating that by the end of July all of their plans will receive a price hike of $5. This may not seem like a huge increase, but if you consider the fact that DIRECTV Now alone has more than a million subscribers, this would make AT&T an additional $5 million a month from its DIRECTV NOW subscribers.
This announcement also comes just days after AT&T Wireless added an additional $1.23 to the Admin Fee for each of its wireless subscribers, again this does not seem like a huge change. Gaining AT&T Wireless almost an additional $80 million per month from its more than 65 million subscribers. With just these two changes, AT&T will bring in more than $1 Billion of additional income annually.
Have these price hikes been in the plan all along? Is AT&T in needing an influx of cash to pay for their $85 Billion purchase of Time Warner? Will there be lawsuits and cases to challenge these hikes? Or possibly reverse the merger?
A DIRECTV spokesperson commented, "In order to ensure DIRECTV NOW can continue to bring both new and existing customers the best possible streaming experience, we need to bring this service in line with the live TV streaming market,"
AT&T has not commented on the rise of the Admin fee for its wireless customer. One month ago AT&T also raised the price of its Grandfathered Unlimited Data plans for the third time. With this trend of changes, will we see more increases in the cost of other services from AT&T and its subsidiaries.
Photo By: The Herald of Finance