Verizon gets on board with device upgrade plan

Verizon gets on board with device upgrade plan

19 JUL 2013

The largest operator in the US, Verizon Wireless, has followed AT&T and T-Mobile in announcing a tariff that enables consumers to upgrade to a new handset during the standard two-year contract, an expected response to its rivals.

Under the Verizon Edge plan, a consumer must pay the retail cost of a phone in 24 monthly installments, alongside their monthly service change. However, an upgrade to a new phone is possible after six months if 50 per cent of its retail cost has been paid off by the user.

After the old phone has been handed in, the consumer is not due for any more payments on it, and starts the same process again with a new device.

Unlike AT&T and T-Mobile, the Verizon scheme is also available for featurephones and not just smartphones.

Despite speculation to the contrary, Verizon Edge does not require any additional subscription beyond a consumer’s existing subscription.

However, the Verizon Wireless plan, which launches 25 August, has been criticised for offering insufficient inducement for consumers to change tariff.

“You’d have to be out of your mind,” to accept this offer, said Moffett Research analyst Craig Moffett in a Bloomberg report.

“The plans Verizon and AT&T are talking about where they’re cutting subsidies upfront without lowering the service price are unlikely to have any impact in the market whatsoever,” he said.

Speaking at yesterday’s results, Verizon CFO Fran Shammo said the new plan would not impact future financials. He did not expect a large percentage of customers to opt for the tariff.

Shammo’s comments were covered by The Verge, whose report was linked to by John Legere, T-Mobile’s frequently outspoken CEO, with the tweeted comment: “What! We actually agree? They all want Jump [T-Mobile’s equivalent tariff]. Verizon CFO doesn’t think most people will sign up for Edge”.

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Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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