Verizon joined AT&T and T-Mobile yesterday by introducing a new upgrade program called Verizon Edge. Similar to the other two carriers’ offerings, the plan involves customers paying a monthly fee in exchange for the ability to upgrade their device earlier.
After crunching some numbers, we found T-Mobile’s program to be the best deal, due to the fact that it separates equipment and service charges. And some folks were hoping Verizon would follow suit here, but CFO Fran Shammo says don’t count on it…
To better explain, carriers have long included ‘extra charges’ in their rate plans to help them recoup the money they paid subsidizing your handset from $600 to $199. It’s estimated that these charges fall somewhere in the neighborhood of $20 per month.
As part of its ‘Uncarrier’ campaign, though, T-Mobile has stopped doing this by dropping the cost of its rate plans and charging for devices completely separately. But both AT&T and Verizon plan to continue doing this, in addition to their Next and Edge fees.
“We will not touch our service pricing,” Verizon Communications Chief Financial Officer Fran Shammo said in an interview after the company’s earnings conference call on Thursday. He said the new Verizon Edge offer, to be launched on August 25, would not have an impact on Verizon’s financial results.”
To be fair, Shammo also said that he does not expect a large percentage of Verizon customers to opt for Edge. And analysts agree. Moffett Research’s Craig Moffett says “you’d have to be out of your mind” to accept this offer. “It’s like paying for your phone twice.”
For what it’s worth, we also agree. Until Verizon and AT&T lower their rate plans, the best bet for folks who are determined to go with an upgrade plan is T-Mobile. Otherwise, we recommend buying your device at full retail, and then selling it at your own leisure.
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