2025 U.S. Wireless Fees and Trends

U.S. Wireless Fees and Trends

 Tony: Hello, today is Monday, August 25th, 2025.  I’m Tony Mangino from TC2 and this is Staying Connected.

I’m joined today by my colleague Frank Zagrodnik and we’re going to do a bit of a deep dive on the fine print of your wireless bill to discuss the taxes, surcharges, and fees that have a material impact on your enterprise mobility budget, and what you can do to get a true picture of your wireless total cost of ownership.

Frank, welcome back to Staying Connected.

Frank: Thanks Tony, great to be back.  

 Last time we spoke, we talked generally about CFO concerns and challenges due to increasing costs across the enterprise network technology budget.  The topic is expansive, evolving with new challenges and spending categories, and cost control is always in the spotlight.  Today, I wanted to highlight some cost considerations specific to wireless services. 

When you think about end-users, the typical discussion is about smartphones and tablets.  While the monthly cost of wireless plans for these devices themselves has been declining in the US for over a decade, with prices down significantly since 2010, a significant portion of a typical US wireless bill is made up of various taxes, fees, and government surcharges.  We often have clients talk about their specific rate plans, but their comments usually end before the real total cost of ownership is ever discussed. 

Tony:  Lets talk about more about the true total cost of ownership.

Frank:  Sure, well, in 2024, taxes, fees, and government surcharges on wireless services reached a record high, comprising upwards of 30% of the average taxable portion of a typical monthly bill. The current landscape of wireless fees, in addition to your monthly service costs fall into 3 categories, 1) Federal Universal Service Fund (FUSF), 2) Supplier specific costs, and 3) State and Local Taxes and Fees.

• Federal Universal Service Fund (FUSF): This charge, which supports telecommunication services in rural and high-cost areas, schools, and libraries, saw a significant increase in 2024, from 10.8% to 12.8%.
• Secondly, and an area that often gets overlooked are the Supplier created fees and surcharges. Suppliers call them by different names, but in the end, they are self-created surcharges to enterprises and consumers to cover their costs of good sold and create higher revenue. 

Recently, one of the major U.S. wireless cited higher churn rates and analysts correlated this to their continued increasing of these fees.  Some of these fees were introduced during Covid but continue to escalate and have nearly doubled since 2022.  So if you signed a contract in the last couple years, this has become a budgetary bust and was never planned for.

Tony:  And what about the state taxes and fees?

Frank:  Right, these vary by state, but the average state and local tax burden on wireless services was 14% in 2024. In 17 states, wireless taxes are more than twice as high as sales taxes on goods. This is unavoidable but needs to be understood in your total cost of ownership and annual budgeting process.

Tony: What else is part of the total cost of ownership conversation?

Frank:  Another consideration we work with our clients on is feature costs.  These can be very specific to your business.  Really two considerations here, 1) how many users need a specific feature and 2) again, what is the cost of this feature. 

In a recent engagement, our client had a Hunt group technology that allowed them to apply rules for passing incoming calls to the first available line in the pre-defined set of employees.  This originally started as a pilot program and grew rapidly across their business.  What the business failed to do in their alignment to finance, and procurement was to go back and do a cost assessment.  They ultimately were paying list rates and never received market-based pricing for the 1,000s of users that were using this feature.  Again, focus on the total cost of ownership and as your business changes and adapts, look back at your contract and what these unique features may be costing.

 Tony: Frank, I have to imagine that the cost of the actual device and associated subsidies has to be a focus area as well?

 Frank:  For sure. Suppliers can differentiate their offering, above and beyond, the monthly plan rates, feature costs and added administrative surcharges by offering varying promotions and subsidies.  This certainly isn’t new.  What is important here is understanding the offer in detail.  As many listeners know we have a TEM and Contract Compliance practice.  It’s common that we review equipment as part of our optimization recommendations for large enterprises.  Many times, the ordering of devices, smartphones and tablets, is a bit of the wild west.  End-users select the longest-term commitment without reviewing specific promotions.  A 30-month term may carry the promotion, and ultimately better pricing than the 36-month term.  It seems a bit counterintuitive, but you need to be reviewing your device orders and invoices to ensure you’re getting the optimal pricing from your contract. 

Also, large enterprises often let promotions expire and don’t stay on top of the latest market offerings.  That certainly plays into the supplier’s advantage by paying inflated costs. 

Tony: Frank, is there any of the proverbial “low hanging fruit” here to be aware of?

Frank:  Well, a focus on zero usage and terminated employees is an area where many enterprises fall short.  Often, there is an off-boarding process, but frequently it falls short in execution.  Periodically, your TEM provider and/or finance should be reviewing your user base and line counts.  This not only may be an important part of your contract for pricing and rates, but often you pay for lines and devices that are not being used.  Nothing will be a larger irritant to a CFO than wasteful and unmanaged costs. 

Tony: Great advice Frank and thank you for joining me today!

To our listeners, if you would like to learn more about how to manage your wireless spend strategically, or if you’d like to discuss other technology strategy, sourcing and cost reduction needs with Frank, me, or any of our TC2 and LB3 colleagues, please give us a call or shoot us an email.

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