After Verizon reported double-digit earnings growth in 2Q 2013, the company confirmed on Thursday that it's launching Verizon Edge next month, a plan that will allow customers to upgrade their phone after 50 percent of the current device is paid off. The confirmation was made by Verizon Communications CEO Fran Shammo during a conference call with analysts after the 2Q 2013 results were released.
"We have a lot of customers in the technology edge that want to upgrade sooner than they would under our historical, legacy, subsidy model, if you will. And we have other customers who don't want to pay upfront for the large cost of the phone," Shammo told analysts.
Agreed. Many customers don't want to carry old devices around like a ball-and-chain, present company included, over a two-year span. The progression of smartphone technology has gotten to the point that new smartphones are seemingly outdated within months. Still, many customers are okay with that, and just don't really care about keeping up with the latest.
Verizon Wireless also confirmed the Edge plan in a blog published on Thursday morning. According to the post, customers can choose the phone they want and sign up for a month-to-month wireless service plan. The full retail price of the device will be divided up over 24 months, and customers will be required to pay the first month at the time of purchase.
To upgrade after six months, 50 percent of the full retail price will need to be paid off. Thus, customers can choose a new phone and start all over again. "There are no long-term service contracts, finance charges or upgrade fees with Verizon Edge," the company said. "Every six months, as long as 50 percent of the cost of the phone has been paid, you can upgrade to the newest basic or smartphone available."
Notice there's no extra monthly subscription fee for the right to upgrade every six months – T-Mobile charges $10 per month. Verizon also covers both standard phones and smartphones, and it's even ahead of the game in regards to LTE coverage: 500 markets compared to AT&T (328) and T-Mobile (110). Verizon also doesn’t require an additional down payment.
According to AllThingsD, the remaining balance of the phone is waived once it's traded in for the upgrade, and is in working condition. As an example, customers wanting the Samsung Galaxy S4 with 16 GB of storage, a $650 purchase, will be required to pay just over $27 per month for 24 months. To upgrade in six months, customers will need to pay $54.17 per month to reach the $325 requirement, half the retail price. Thus, the remaining $325 is waived and the process begins again.
Remember that the device payment is in addition to the required Share Everything plan which starts at $40 per month. This allows family members to share unlimited calls, unlimited texts, and a set pool of data. Customers who participate in Verizon Edge and still retain their unlimited data from older plans will be forced to use the new data pool scheme (it's not bad actually).
"We’ll continue to offer phones on contract for customers. We think that will continue for a long time, and that’s what customers have gravitated toward," said Ken Dixon, vice president and chief marketing officer at Verizon. "But Verizon Edge is the next evolution of our program. We have many people coming in saying they want the latest and greatest in technology, and we think this a great option for those customers."
Just this week, AT&T jumped on the early upgrade bandwagon with its Next plan. This allows subscribers to upgrade their phone every 12 months based on a 20-month payment cycle without the need for a monthly fee or down payment. T-Mobile's Jump program allows upgrades up to every six months for a $10 fee, but requires an initial down payment on the device.
Verizon Edge will be available to customers on Share Everything plans starting August 25th.