Verizon and Sprint wireless customers will get a small break on their bills soon. The companies have decided to eliminate or reduce a 40-cent-per-line monthly charge imposed to allow customers to transfer their phone numbers to new carriers.
The small surcharge has provided the companies with tens of millions of dollars in extra monthly revenue, and Verizon Wireless and Sprint PCS Group said they don't need as much to continue offering the number transfer service.
Starting with bills scheduled to go out next week, Verizon Wireless will eliminate the number transfer fee for its 42 million customers. Sprint PCS, the nation's third-largest national cellular carrier, will cut its fee to 25 cents effective this month. Sprint PCS had initially charged $1.10 for the service before a reduction to 40 cents in June.
Cell phone companies charge regulatory fees to comply with various government rules requiring them to offer services such as emergency 911 calling from a wireless phone. Allowing customers to transfer their number between carriers is one of those government requirements.
"In this heavily taxed industry, we do not advocate adding anything unnecessary or extraneous to our customers' monthly bill," Dennis F. Strigl, chief executive of Verizon Wireless, said in a statement.
Verizon Wireless is also looking to hone its appeal to customers. "I think without a doubt it makes us more competitive, when you look at some of the fees that some of these other companies charge," said John Johnson, a spokesman for Verizon Wireless.
Sprint PCS spokeswoman Lisa Ihde said the company is always evaluating its fees but not with the intention of using its fee structure as a marketing tool.
The Federal Communications Commission does not set a limit on how much cell phone carriers can charge customers to cover the cost of complying with rules.
Cingular Wireless, which recently acquired AT&T Wireless Services Inc., charges between 56 cents and $1.25 a month, depending on the state, to cover number transfers and 911 calling. AT&T Wireless customers will continue to pay a $1.75 monthly fee until Cingular unifies the two networks. T-Mobile USA Inc. charges its customers 86 cents for number transfer and 911 calling. Nextel Communications Inc. charges $1.55 a month to cover all of its regulatory fees.
"We call on all wireless providers to reduce or eliminate these fees as well," said Janee Briesemeister, director of a cell phone consumers rights project at the Consumers Union. "We've always questioned whether the fees being charged for number portability were covering the actual costs of switching phone numbers or were simply being charged to pad profits."