Verizon Wireless (NYSE: VZ) will start charging a $20 fee to customers who activate new lines of service on Verizon's "device payment option," its equipment installment plan (EIP). The changes go into effect on Nov 15. Up until now, Verizon has not charged any activation fee for customers who choose its EIP option.
"The one-time device payment activation fee helps cover the costs of turning on a new line of service, like activating the phone number," Verizon spokeswoman Kelly Crummey told FierceWireless. She noted that the device payment activation fee remains lower than the activation fee Verizon charges for two-year contracts, which is a one-time $40 fee.
The changes were first noted by the blog Droid-Life as well as Wave7 Research.
Starting in August, Verizon said all new smartphone customers would need to choose its EIP option for activating a new smartphone. Existing customers on two-year service contracts with subsidized smartphones can renew their two-year contracts and keep their subsidized smartphone pricing. "Most new lines are activated on this plan, so this move will have a positive impact on revenues," Wave7 noted in a research report.
Wave7 also said "activation fees are generally an afterthought when it comes to carrier selection, so boosting activation fees may be a solid way for Verizon to boost revenues with minimal competitive impact."
The changes from Verizon are in line with other moves made recently by competitors. Starting Aug. 1, AT&T Mobility (NYSE: T) introduced a $15 upgrade fee for customers who choose to activate a device on its Next equipment installment plans, the first time such a fee was applied to Next plans. Also as of Aug. 1, AT&T increased the activation fee for one- and two-year contracts from $40 to $45.
Sprint (NYSE: S) generally charges a $36 activation fee for two-year contracts, as well as its Easy Pay EIP program and its leasing program. T-Mobile US (NYSE:TMUS) says that any new customers choosing its no-contract "Simple Choice" plans will be activated without a fee, though it does charge $15 for a "SIM starter kit" on activations.
Also starting Nov. 15, Verizon will be increasing the price of its unlimited data plans by $20 per month for the customers who still have grandfathered unlimited plans. The price increase, which will affect a tiny percentage of Verizon customers, could be designed to get subscribers to switch to newer usage-based shared data plans, which might actually be cheaper in some cases, depending on the customer's usage. Verizon says 99 percent of its customers are not on unlimited data plans; the carrier stopped offering unlimited data plans to new customers in 2011.
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