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VZ getting rid of early upgrades


lilotimz
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Looks like verizon is getting rid of their early upgrade. Bet ATT will be following in a few months...

 

 

 

 

Verizon Wireless (NYSE:VZ) announced it will no longer allow customers to upgrade their handset at a subsidized price before the end of their 24-month contract. Previously, the carrier allowed some subscribers to upgrade their phones at a subsidized price after 20 months.

The action is likely an attempt by Verizon to improve its margins. The carrier, like most other wireless operators, offers phones at far below their actual value, and ties customers into a two-year service contract in order to recoup the cost of that phone subsidy. Those subsidies can cut into wireless carriers' profits.

Verizon said it will begin implementing the change in its upgrade policy on customers whose contracts expire in January 2014. Verizon pointed out that customers "may purchase a new phone at the full retail price at any time prior to the end of their contract."

 

 

 

 

Verizon also said that customers with "New Every Two" credits have until Monday to use those credits. Verizon ended its New Every Two handset upgrade program in January 2011.

Finally, Verizon said that customers can continue to share an upgrade with another person on an account "as long as that customer is purchasing another device in the same category." Verizon said a basic phone or a smartphone upgrade can be used to purchase another mobile phone, but customers can't transfer that upgrade opportunity to "non-phone devices" like a mobile hotspot or tablet.

This isn't the first time Verizon has tweaked its policies to protect its margins. The carrier last year began charging a $30 upgrade fee for existing customers purchasing new mobile equipment at a subsidized price with a two-year contract.

And it appears Verizon's actions are working: The carrier has said it expects its wireless EBITDA margin to rebound from a dip last year of 46.6 percent to around 49 to 50 percent this year.

Further, Verizon isn't alone in boosting its margins by tightening its upgrade policies. As Americans continue to snap up expensive smartphones, most of the nation's other major carriers have restricted their handset upgrade policies to boost margins. For example, AT&T Mobility (NYSE:T) late last year said its wireless EBITDA service margin increased to 45 percent from 41.1 percent in the year-ago quarter due to changes the carrier made to its handset upgrade policy, as well as higher upgrade fees and altered pricing for mobile data.

 

 

Read more: Verizon tightens handset upgrade policy - FierceWireless http://www.fiercewir...2#ixzz2QJ37NyTb

Subscribe at Fierce Pharma

 

http://www.fiercewir...licy/2013-04-12

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Also read they are going to roll out contract free device financing without reduced monthly costs.

 

If that happens, ATT copycats and Sprint raises prices while preserving its value proposition. And everyone said higher sprint prices were the end of the world.... sigh

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Also read they are going to roll out contract free device financing without reduced monthly costs.

 

If that happens, ATT copycats and Sprint raises prices while preserving its value proposition. And everyone said higher sprint prices were the end of the world.... sigh

I hope sprint doesn't raise there prices

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In economics they teach that monopolistic competitors will match price decreases but not price increases. I don't see the price of wireless services going up.

If it does im going prepaid 79 a month is a lot as it is. Before taxes and fees

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Looks like verizon is getting rid of their early upgrade. Bet ATT will be following in a few months...

 

A few months? Please, AT&T copies verizon within weeks,,,,

 

 

And yes, verizon started charging $35 for upgrades as of last summer. Previously no charge. They eliminated the 1 year upgrade option last year as well, and removed their NE2 program (discounted upgrade on top of the advertized discount price, depending on your monthly bill).

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