Verizon’s recently announced upgrade fee digs deeper into your pocket with no added value – so what else is new? But will this fee generate animosity and pushback, like so many others (most notably from banks) have? No, it won’t.
I suppose we should all be used to fees, fees, and more fees these days, as our banks, airlines, and now our cellular carriers find new ways to grab us by the ankles and shake. Verizon’s recently-announced US$30 upgrade fee applies to anyone upgrading their phone under a new two-year contract. You still get this discount off list for the handset, but you get to toss in another $30 just because.
I’m not at all outraged by this development, perhaps because I’m now getting used to paying fees on top of fees practically everywhere these days. And this isn’t an unreasonable charge given there’s a service cost to process the upgrade and Verizon’s competitors are already charging such a fee and, I mean, where are you going to go? Verizon is the premium network; we customers (and I am one) get to pay a premium price. They could have raised the upgrade price of handsets, but the standalone fee makes more sense from a marketing perspective.
But isn’t such a move self-defeating? Isn’t it in a carrier’s best interest to get us to upgrade a new device? Don’t they make money on the deal (over the length of a given contract, via higher service revenues)? And aren’t upgrades always a good idea overall, providing consumers with more capable devices, carriers with more efficient and more reliable devices, and getting devices using old technologies out of the system with added haste? Won’t consumers regardless push back?
Nah. I suppose one could get all indignant when asked to pay $30 more, and, who knows, Verizon might waive the fee for really good customers. I get fees waived all the time just by complaining. But most people will, I think, just say, hey, it’s not worth the hassle and I have better things to do with my time; I am, after all, getting that shiny new phone I really, really want. And all cell phones eventually go to heaven, whether through loss or just simple wear and tear. Consumers regardless like to get new phones, and the rate of innovation in this space has been high enough that people are buying boatloads of them – it’s been estimated that Verizon will make over US$1 billion on this new fee alone! And, of course, they can always just send a note to people who have owned their phones for a long time saying that, well, sorry, but your phone is being phased out on our network, and you’ll have to come in for a new one, which will cost you at least $30 – as many phones are still free under two-year deals.
And Verizon does point out that they’ll actually pay you to recycle your old phone, so, hey, the upgrade expense might just be a wash. Regardless, trust me, you want a new phone and 30 bucks isn’t going to stand between you and that. The long-term solution, as I’ve previously advocated, remains separating the device from the service, creating a competitive market for both – but that’s not going to happen here anytime soon.
