Beginning in the spring of 2022, Verizon Wireless announced an “Economic Adjustment Charge”, or EAC, to all U.S. smartphone and data plans. While wireless carriers often make changes to their pricing plans to stay competitive in the market and to cover the costs of maintaining and improving their networks, this EAC is applied regardless of your contracted rate, as the EAC is in fact outlined as a possibility in almost all wireless contracts. Although $2.20 per smartphone might seem minimal, the rate increase had a significant impact on large Enterprise accounts with 10K+ lines.
The Economic Adjustment Charge is a fee that is added to a customer’s monthly bill to cover the cost of changes in the carrier’s operating expenses, such as increases in taxes, regulatory fees, and network maintenance costs. It is assumed that inflation was the primary driver for Verizon’s increase; they are passing along increases in their cost to provide service to their customers. This charge is typically a small amount, ranging from a few cents to a few dollars per month, depending on the carrier and the specific changes being covered. For Verizon customers, effective January 11, 2023, the monthly EAC for smartphones and data devices will increase from $2.20 to $2.98 per month/line. The charge for basic phone and tablet devices will remain $0.98.
In general, carriers may decide to implement an Economic Adjustment Charge for a variety of reasons. For example, they may face increased costs due to new government regulations or taxes, or they may need to make significant investments in their network infrastructure, like the recent 5G rollout, to keep up with demand and provide better service to their customers. Whatever the reason, carriers typically use the EAC to pass on these increased costs to their customers in a transparent and predictable manner, rather than raising prices across the board. To date, we have only seen Verizon adopt EACs; no other U.S. or Global carrier that Mindglobal works with has enacted this type of rate change.
If you’re working with a telecom expense management firm like Mindglobal, you may be able to tap into their ability to negotiate better contracts on your company’s behalf. It’s possible to address these EACs or other erroneous charges at the outset of a new contract negotiation to help contain costs for the term of the contract.
Mindglobal is proud to have partnered with several of our clients who were actively undergoing, or on the brink of beginning contract negotiations. Having an advocate for your business who not only is aware of these price changes but who also has perspective across millions of phone lines and hundreds of contracts across every major carrier in the U.S. works to your advantage. It’s just part of the service that we offer to our clients.