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Ultra Mobile Adding Taxes and Fees to All Airtime Purchases

T-Mobile MVNO Ultra Mobile has announced that it is adding fees and taxes to the price of all airtime top-ups and plan renewals.

  • Effective May 1, 2014, Ultra will add a "cost recovery fee" to all airtime purchases at retail locations. The fee will be 50¢ on airtime loads of $10 or less and $1 on airtime loads of $10.01 or more. Callingmart and other online PIN sellers have added this fee to the price of Ultra refills as well. 
  • Effective May 21, 2014, Ultra will begin collecting government fees and taxes, including sales and use taxes and Federal Universal Service Fund Fees, on all transactions processed directly by Ultra using a credit or debit card. These taxes vary with the user's location. 
The addition of taxes and fees to prepaid plan payments is a disturbing trend. Traditional prepaid prices have included all taxes and fees with the exception of legally required point of sales taxes. Things like the Universal Service Fund fee are business taxes that mobile operators pay. Operators are allowed to pass these fees on to customers but are not required to. Passing on taxes and fees that used to be included is a price increase. But unlike a normal price increase which is easy to see, fees that aren't included in the plan's price and vary from state to state and city to city make it hard to compare different operator's offerings. Fortunately the majority of prepaid operators still include all taxes and fees in the plan price.

Ultra also announced that the high-speed data allowance included with the grandfathered $59/month plan will be reduced from 4GB to 2GB. The throttled data speed after 2GB has also been reduced from 256kbps to 128kbps. The changes will go into effect with the plan renewals after May 7, 2014. The $59 Plan was discontinued April 1, 2014, but customers on that plan were allowed to continue using it.

Related:
T-Mobile MVNO Ultra Mobile Revamps Plan Lineup, Here's What's Changing
T-Mobile and T-Mobile MVNO Prepaid Plans Compared

13 comments:

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  1. Ultra still provides a lot of value with the $19 (now $20) plan, even if you add 50, 250 or 500 mb data with Ultra Up. If you only need up to 1000 minutes or so, this is a very competitive plan that no other MVNO matches (T-Mobile only gives 100 minutes on the $30/5GB plan).

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  2. Is anyone else getting disconnected on the 5th minute of an international call with Ultra? Started happening to me recently and so Ultra Zero is practically useless to me now.

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  3. I assume refills from callingmart will not be affected by the new surcharges.

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    1. Callingmart has already added the $1 fee to all Ultra refills. Ultra has added $1 to the wholesale price charged to all dealers.

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  4. The addition of fees and taxes seems to be a growing trend, and Ultra Mobile is not by any means alone. Generally, in ANY industry, if a company starts raising prices or lowering service even in the face of competition, others are more likely than not to follow suit, because it is a sign of structural problems common to the entire industry.

    This trend of adding previously hidden fees and taxes to prepaid services is probably due to the fact that many state governments have been becoming more demanding about the collection of these taxes lately.

    It's also worth considering that the end, there is simply no way you can levy a tax on a business and not the consumer. One way or another, a tax on a business takes away from the funds available to the business, and if they expect to provide quality service and make the needed capex and opex, then sooner or later, this reduction of funds WILL get passed on to the consumer. Why hide this? Sure, it's a price increase, but we might as well be aware of what is causing these increases: Government! It's not the business's fault.

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  5. Does Ultra sell nano SIMs? Last time I checked they didn't, but the picture in this post sure looks like you can punch out a nano FF from the card.

    (Also, please no one reply that I can just buy a SIM cutter, etc. I don't need to mess up another phone by messing with non
    -factory cut SIM cards.)

    Thanks!

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    Replies
    1. There's no mention of nano SIMs on the Ultra site. The only SIM they sell is a
      Dual-punch SIM for standard and micro-SIM sized phones.

      Delete
  6. So is this trend of charging taxes on prepaid a way to avoid raising prices, that way these MVNOs can keep their prices at $19, $29, $39, $49 ... wouldn't look as good if instead of taxes they raised prices to something like: $22, $32, $42, $53 ...

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    Replies
    1. adding taxes. a pricing strategy to make you ALMOST think you're not paying more. but really to preserve what revenue made by the mvno plus what's left of any thin profit margin that a mvno has.

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  7. Ultra's going to take a hit in popularity. I believe Yesswap put the 4gb down to 2gig on the $59 plan . I think they, like many small mvnos are trying to get away from the higher end data hog plans leaving that territory to the big boys like Tracfone and the Prepaid divisions while they go for the low end talk/text market. $19 plan will garner a lot of attention but this is going to hurt them on the high end. Tmobile, Gosmart and Simple will have their lunch in that area.

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  8. Accidental typo ... Ultra also announced that the high-speed data allowance included with the grandfathered $59/month plan will be reduced from 2GB to 4GB. I think you meant that data would be reduced from 4GB to 2GB.

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  9. Page Plus already implemented this as soon as the America Movil acquisition occurred. Interesting to see if any of the AT&T MVNO's follow.

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