Verizon subscribers will now have to pay a $30 fee to upgrade to a new phone. This is a significant increase from the $20 requirement when switching to a new handset.
Fee For Verizon Phone Upgrade
The new policy has reportedly taken into effect last Jan. 5, but there seems to be no official announcement explaining the move.
You will only find Verizon's reference to the change in the company's FAQ page, buried deep in the Support section.
"You will be charged a $30 upgrade fee if you purchase a new device at retail price or through the device payment program," the entry stated.
Why The Increase?
Sans any official word, consumers can turn to reports that explain Big Red's new upgrade fee. Engadget, for example, cited a leaked Verizon memo, which stressed how the fee will be implemented to cover increasing support costs incurred when customers switch to a new device.
There are also sources claiming that it is also a way for Verizon subscribers to help foot the bill for the increasing expenses in the provision of Verizon's 4G LTE network. This was already confirmed by Verizon, although no details were provided.
What is interesting, however, is the fact that Verizon's capital expenditures are actually plummeting year-on-year. According to Ars Technica, which first spotted the new upgrade fee, Verizon's latest earnings report indicated that the cost of improving its network has been declining since 2015. Its overall wireless operating expenses has been shaved by as much as 5 percent between 2015 and 2016.
The earnings report, however, indicated how the operating revenue has declined, possibly driving Verizon to charge customers the extra $10.
On Verizon Unlimited Data
The uptick in the upgrade fee is not going to be the only cause of concern for subscribers. According to Droid Life, Verizon has now placed a new 200 GB cap on grandfathered unlimited data users' plans.
The move is aimed at heavy data users, which Verizon has identified as abusive and unfair to other users. Those who will exceed the cap will be forced to move to tiered data plans. Otherwise, their accounts will be terminated.
It appears that Verizon would rather have heavy data users go rather than risk having them stay and consume bandwidth. The company has been increasingly concerned about data usage recently. Last October, officials have told investors that they are preparing for the onslaught of video streaming with the rollout of its LTE Advanced service.
Bandwidth activity could also pick up once Verizon launched its 5G technology. The data cap could be serving as a mechanism to keep Big Red's network from getting overwhelmed.