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Starting Nov. 15, Verizon plans to double its early termination fee (ETF) -- to $350 -- for customers who end their cellphone contracts early. The fee, arriving just in time for the holidays, applies to customers who have a smart phone or other advanced device on a one or two year contract.
The penalty will decrease by $10 for each month of service completed. If a customer completes five months of service, the penalty would be reduced to $300, for example. The fee, the highest ever imposed by a major carrier, “is insane,” says Joel Kelsey of Consumers Union, the USA’s largest consumer group. “There’s no justification” for a fee that high, he says. “It’s punitive to customers who decide to leave Verizon early.”
Not so says Verizon. “This has to do with the cost we pay for the device,” says spokesman Jim Gerace. Verizon customers, he notes, can buy a subsidized Blackberry for as little as $99. What Verizon pays to Blackberry-maker Research In Motion, however, “is far north of that,” he says.
The wireless industry has long subsidized devices to hold down retail costs, then charged customers a penalty if they exited their contracts early. The standard ETF is currently around $175 to $200. It was established years ago, when expensive smart phones, netbooks and other advanced devices didn’t exist, Gerace says.
Gerace says ETFs on other Verizon wireless devices, such as standard cellphones, won’t change. The current ETF is $175, and it decreases by $5 a month for each month of the contract’s term that is completed.
Kelsey says he’s unimpressed. “ETFs are already too high,” he says. “This ($350 fee) is absolutely ridiculous."
Update: Gerace contacted us to point out that all Verizon phones, including smart devices, are available without a contract at a full, unsubsidized, price. But be prepared to pay up. Example: The Blackberry Storm 2. Verizon sells it for $179 with a two year contract and, soon, a $350 ETF. Or you can pay full retail -- $539 -- with no contract or ETF.
> Starting Nov. 15, Verizon plans to double its early termination fee > (ETF) -- to $350 -- for customers who end their cellphone contracts early. > The fee, arriving just in time for the holidays, applies to customers who > have a smart phone or other advanced device on a one or two year contract.
> The penalty will decrease by $10 for each month of service completed. If a > customer completes five months of service, the penalty would be reduced to > $300, for example. > The fee, the highest ever imposed by a major carrier, “is insane,” says > Joel Kelsey of Consumers Union, the USA’s largest consumer group. “There’s > no justification” for a fee that high, he says. “It’s punitive to > customers who decide to leave Verizon early.”
> Not so says Verizon. “This has to do with the cost we pay for the device,” > says spokesman Jim Gerace. Verizon customers, he notes, can buy a > subsidized Blackberry for as little as $99. What Verizon pays to > Blackberry-maker Research In Motion, however, “is far north of that,” he > says.
> The wireless industry has long subsidized devices to hold down retail > costs, then charged customers a penalty if they exited their contracts > early. The standard ETF is currently around $175 to $200. It was > established years ago, when expensive smart phones, netbooks and other > advanced devices didn’t exist, Gerace says.
> Gerace says ETFs on other Verizon wireless devices, such as standard > cellphones, won’t change. The current ETF is $175, and it decreases by $5 > a month for each month of the contract’s term that is completed.
> Kelsey says he’s unimpressed. “ETFs are already too high,” he says. “This > ($350 fee) is absolutely ridiculous."
> Update: Gerace contacted us to point out that all Verizon phones, > including smart devices, are available without a contract at a full, > unsubsidized, price. But be prepared to pay up. Example: The Blackberry > Storm 2. Verizon sells it for $179 with a two year contract and, soon, a > $350 ETF. Or you can pay full retail -- $539 -- with no contract or ETF.
I don't have a problem with them subsidizing the cost of a device, which I'm paying for as part of my monthly service charge, but once my two year term is up, unless I get another subsidized device, my service charges should go down, as I'm no longer paying for a subsidized device, but they don't
> Starting Nov. 15, Verizon plans to double its early termination fee > (ETF) -- to $350 -- for customers who end their cellphone contracts > early. The fee, arriving just in time for the holidays, applies to > customers who have a smart phone or other advanced device on a one or > two year contract.
> The penalty will decrease by $10 for each month of service completed. > If a customer completes five months of service, the penalty would be > reduced to $300, for example. > The fee, the highest ever imposed by a major carrier, “is insane,” > says Joel Kelsey of Consumers Union, the USA’s largest consumer group. > “There’s no justification” for a fee that high, he says. “It’s > punitive to customers who decide to leave Verizon early.”
> Not so says Verizon. “This has to do with the cost we pay for the > device,” says spokesman Jim Gerace. Verizon customers, he notes, can > buy a subsidized Blackberry for as little as $99. What Verizon pays to > Blackberry-maker Research In Motion, however, “is far north of that,” > he says.
> The wireless industry has long subsidized devices to hold down retail > costs, then charged customers a penalty if they exited their contracts > early. The standard ETF is currently around $175 to $200. It was > established years ago, when expensive smart phones, netbooks and other > advanced devices didn’t exist, Gerace says.
> Gerace says ETFs on other Verizon wireless devices, such as standard > cellphones, won’t change. The current ETF is $175, and it decreases by > $5 a month for each month of the contract’s term that is completed.
> Kelsey says he’s unimpressed. “ETFs are already too high,” he says. > “This ($350 fee) is absolutely ridiculous."
> Update: Gerace contacted us to point out that all Verizon phones, > including smart devices, are available without a contract at a full, > unsubsidized, price. But be prepared to pay up. Example: The > Blackberry Storm 2. Verizon sells it for $179 with a two year > contract and, soon, a $350 ETF. Or you can pay full retail -- $539 -- > with no contract or ETF.
I don't understand what about Verizon's position consumers don't get. The phones are expensive. Verizon subsidizes them if you take a plan, which is by the way, a contract. Not a one-way contract, but one with obligations by both parties. If you want to break your end of the contract, you must pay for the phone. What's so hard to grasp about that? Verizon is not a public service utility. It is a profit-making company. How many of you are in business? How many of you have prices and rules only to benefit the customers and not your bottom line?
>> Starting Nov. 15, Verizon plans to double its early termination fee >> (ETF) -- to $350 -- for customers who end their cellphone contracts >> early. The fee, arriving just in time for the holidays, applies to >> customers who have a smart phone or other advanced device on a one >> or two year contract. The penalty will decrease by $10 for each month of >> service >> completed. If a customer completes five months of service, the >> penalty would be reduced to $300, for example. >> The fee, the highest ever imposed by a major carrier, "is insane," >> says Joel Kelsey of Consumers Union, the USA's largest consumer >> group. "There's no justification" for a fee that high, he says. >> "It's punitive to customers who decide to leave Verizon early."
>> Not so says Verizon. "This has to do with the cost we pay for the >> device," says spokesman Jim Gerace. Verizon customers, he notes, can >> buy a subsidized Blackberry for as little as $99. What Verizon pays >> to Blackberry-maker Research In Motion, however, "is far north of >> that," he says.
>> The wireless industry has long subsidized devices to hold down retail >> costs, then charged customers a penalty if they exited their >> contracts early. The standard ETF is currently around $175 to $200. >> It was established years ago, when expensive smart phones, netbooks >> and other advanced devices didn't exist, Gerace says.
>> Gerace says ETFs on other Verizon wireless devices, such as standard >> cellphones, won't change. The current ETF is $175, and it decreases >> by $5 a month for each month of the contract's term that is >> completed. Kelsey says he's unimpressed. "ETFs are already too high," he >> says. >> "This ($350 fee) is absolutely ridiculous."
>> Update: Gerace contacted us to point out that all Verizon phones, >> including smart devices, are available without a contract at a full, >> unsubsidized, price. But be prepared to pay up. Example: The >> Blackberry Storm 2. Verizon sells it for $179 with a two year >> contract and, soon, a $350 ETF. Or you can pay full retail -- $539 >> -- with no contract or ETF.
> I don't have a problem with them subsidizing the cost of a device, > which I'm paying for as part of my monthly service charge, but once > my two year term is up, unless I get another subsidized device, my > service charges should go down, as I'm no longer paying for a > subsidized device, but they don't
Nobody runs their business that way and neither do you, supposing you have one. If you're not happy with the rules, either don't play or take the new phone. Vz is a profit-making company, not a public service. They have a right to not adjust your monthly rate. Those rules are explained right up front. Get over it.
: > Verizon Wireless doubles early termination fee : > http://preview.tinyurl.com/yg57yz4 : > : > Starting Nov. 15, Verizon plans to double its early termination fee : > (ETF) -- to $350 -- for customers who end their cellphone contracts : > early. The fee, arriving just in time for the holidays, applies to : > customers who have a smart phone or other advanced device on a one or : > two year contract. : > : > The penalty will decrease by $10 for each month of service completed. : > If a customer completes five months of service, the penalty would be : > reduced to $300, for example. : > The fee, the highest ever imposed by a major carrier, “is insane,” : > says Joel Kelsey of Consumers Union, the USA’s largest consumer group. : > “There’s no justification” for a fee that high, he says. “It’s : > punitive to customers who decide to leave Verizon early.” : > : > Not so says Verizon. “This has to do with the cost we pay for the : > device,” says spokesman Jim Gerace. Verizon customers, he notes, can : > buy a subsidized Blackberry for as little as $99. What Verizon pays to : > Blackberry-maker Research In Motion, however, “is far north of that,” : > he says. : > : > The wireless industry has long subsidized devices to hold down retail : > costs, then charged customers a penalty if they exited their contracts : > early. The standard ETF is currently around $175 to $200. It was : > established years ago, when expensive smart phones, netbooks and other : > advanced devices didn’t exist, Gerace says. : > : > Gerace says ETFs on other Verizon wireless devices, such as standard : > cellphones, won’t change. The current ETF is $175, and it decreases by : > $5 a month for each month of the contract’s term that is completed. : > : > Kelsey says he’s unimpressed. “ETFs are already too high,” he says. : > “This ($350 fee) is absolutely ridiculous." : > : > Update: Gerace contacted us to point out that all Verizon phones, : > including smart devices, are available without a contract at a full, : > unsubsidized, price. But be prepared to pay up. Example: The : > Blackberry Storm 2. Verizon sells it for $179 with a two year : > contract and, soon, a $350 ETF. Or you can pay full retail -- $539 -- : > with no contract or ETF. : > : I don't understand what about Verizon's position consumers don't get. The : phones are expensive. Verizon subsidizes them if you take a plan, which is : by the way, a contract. Not a one-way contract, but one with obligations by : both parties. If you want to break your end of the contract, you must pay : for the phone. What's so hard to grasp about that? Verizon is not a public : service utility. It is a profit-making company. How many of you are in : business? How many of you have prices and rules only to benefit the : customers and not your bottom line?
Correct me if I'm wrong if if I have my own phone I'm still subject to the ETF.
On 2009-11-09, Carl <croth...@NOSPAMoptonline.net> wrote:
> RBM wrote: >> I don't have a problem with them subsidizing the cost of a device, >> which I'm paying for as part of my monthly service charge, but once >> my two year term is up, unless I get another subsidized device, my >> service charges should go down, as I'm no longer paying for a >> subsidized device, but they don't
> Nobody runs their business that way and neither do you, supposing you have > one. If you're not happy with the rules, either don't play or take the new > phone. Vz is a profit-making company, not a public service. They have a > right to not adjust your monthly rate. Those rules are explained right up > front. Get over it.
Actually, mobile companies in many (most?) other countries run their business exactly like that. Plans which aren't paying for a phone are cheaper than equivalent plans which came with a phone. Even in the US T-Mobile gives you a $10/month break on their contract-free, no-phone-subsidy plans now.
Unfortunately the market in the US doesn't seem to be as intensely price-competitive as other places so the carriers can mostly get away with taking higher margins from out-of-contract customers.
: : > Correct me if I'm wrong if if I have my own phone I'm still : > subject to the ETF. : : You're wrong. You can sign on to VZW w/o a contract if you have your : own phone, exactly the situation that I'm in now.
That was the way it was after my last contract expired. And I did drop service for several years. I called VZN the other day to re-up and was told I could get a higher no contract rate or go for a term contract and get a package rate and be subject to early terminate fee if I canceled before the end of the term.
So what am I missing? (other than a clued in CS rep?)
> Starting Nov. 15, Verizon plans to double its early termination fee > (ETF) -- to $350 -- for customers who end their cellphone contracts > early. The fee, arriving just in time for the holidays, applies to > customers who have a smart phone or other advanced device on a one or > two year contract.
What a great opportunity to walk away to a prepaid service like Pageplus with no contract, no ETF, no tax/funny fees and no funny business like the paragraph above this one.
Wow....$350 x 5.3c/min = 6,603 minutes on PagePlus!...110 HOURS of TALKING!
> Nobody runs their business that way and neither do you, supposing you > have one. If you're not happy with the rules, either don't play or > take the new phone. Vz is a profit-making company, not a public > service. They have a right to not adjust your monthly rate. Those > rules are explained right up front. Get over it.
"Elmo P. Shagnasty" <el...@nastydesigns.com> wrote in news:elmop- D2A196.19405608112...@news.eternal-september.org:
> The very same phone is available on the shelf at Walmart and Target for > $20 ($17 on sale), for use with Verizon prepaid service.
> And in fact, the phone is not locked to Verizon's prepaid service. It > may be locked to the Verizon network, but it works just fine with > PagePlus prepaid service. Therefore, the whole "we're subsidizing the > cost so you'll use our service" thing is fishy right from the beginning.
"NotMe" <m...@privacy.net> wrote: > "XS11E" <xs11...@SPAMyahoo.com> wrote in message > news:Xns9CBDB58EE3D46xs11eyahoocom@127.0.0.1... >: "NotMe" <m...@privacy.net> wrote: >: >: > Correct me if I'm wrong if if I have my own phone I'm still >: > subject to the ETF. >: >: You're wrong. You can sign on to VZW w/o a contract if you have >: your own phone, exactly the situation that I'm in now.
> That was the way it was after my last contract expired. And I did > drop service for several years. I called VZN the other day to > re-up and was told I could get a higher no contract rate or go for > a term contract and get a package rate and be subject to early > terminate fee if I canceled before the end of the term.
> So what am I missing? (other than a clued in CS rep?)
A clued CS rep. I'm paying EXACTLY the same rate for the same plan that I had when I left but I didn't drop service for as long as you did.
Dennis Ferguson wrote: > On 2009-11-09, Carl <croth...@NOSPAMoptonline.net> wrote: >> RBM wrote: >>> I don't have a problem with them subsidizing the cost of a device, >>> which I'm paying for as part of my monthly service charge, but once >>> my two year term is up, unless I get another subsidized device, my >>> service charges should go down, as I'm no longer paying for a >>> subsidized device, but they don't
>> Nobody runs their business that way and neither do you, supposing >> you have one. If you're not happy with the rules, either don't play >> or take the new phone. Vz is a profit-making company, not a public >> service. They have a right to not adjust your monthly rate. Those >> rules are explained right up front. Get over it.
> Actually, mobile companies in many (most?) other countries run their > business exactly like that. Plans which aren't paying for a phone are > cheaper than equivalent plans which came with a phone. Even in the US > T-Mobile gives you a $10/month break on their contract-free, > no-phone-subsidy plans now.
> Unfortunately the market in the US doesn't seem to be as intensely > price-competitive as other places so the carriers can mostly get > away with taking higher margins from out-of-contract customers.
> Dennis Ferguson
You may have a point there. But what we (the layman-consumer) don't know is if that $40/month basic plan (for one example) has a large enough profit margin in it to cover both the service AND the cost of a phone within only 24 months.
Perhaps Verizon (and others in the U.S.) work on a sort of 'capitation' system: that is, they depend on people continuing the service without taking a new phone to defray the costs of the people who do take phones; sort of an 'averaging out' system.
I doubt this is correct, but if it is, then our way of thinking would be incorrect.
>>>> Correct me if I'm wrong if if I have my own phone I'm still >>>> subject to the ETF.
>>> You're wrong. You can sign on to VZW w/o a contract if you have >>> your own phone, exactly the situation that I'm in now.
>> That was the way it was after my last contract expired. And I did >> drop service for several years. I called VZN the other day to >> re-up and was told I could get a higher no contract rate or go for >> a term contract and get a package rate and be subject to early >> terminate fee if I canceled before the end of the term.
>> So what am I missing? (other than a clued in CS rep?)
> A clued CS rep. I'm paying EXACTLY the same rate for the same plan > that I had when I left but I didn't drop service for as long as you > did.
Of course. What he's missing is that he dropped the service. There are 'loyalty' benefits. You haven't demonstrated being a loyal customer, so you forfeited those benefits. Again, looking at the business-for-profit model and not the 'consumer-is-always-protected' model, it costs the company more for people who come and go. Thus, they should pay more.
Elmo P. Shagnasty wrote: > In article <4af75c30$0$5017$607ed...@cv.net>, > "Carl" <croth...@NOSPAMoptonline.net> wrote:
>> I don't understand what about Verizon's position consumers don't >> get. The phones are expensive. Verizon subsidizes them if you take a >> plan, which is by the way, a contract. Not a one-way contract, but >> one with obligations by both parties. If you want to break your end >> of the contract, you must pay for the phone. What's so hard to grasp >> about that?
> What's wrong here is that the numbers VZW claims are the prices of the > gear are just random numbers, pulled out of their asses to make some > spreadsheet work.
> Example: go to VZW's site and look for the Samsung Smooth 350. > $70--but "FREE with two year contract!" Right? Seventy dollars.
> The very same phone is available on the shelf at Walmart and Target > for $20 ($17 on sale), for use with Verizon prepaid service.
> And in fact, the phone is not locked to Verizon's prepaid service. It > may be locked to the Verizon network, but it works just fine with > PagePlus prepaid service. Therefore, the whole "we're subsidizing the > cost so you'll use our service" thing is fishy right from the > beginning.
> So, Carl, what is the real price of that particular phone--is it $70? > Or is it $17?
> That $70 number that VZW puts out on its web site is just a random > number, with no actual connection to VZW's cost of doing business in > any way. They just decided to price it along the random continuum of > prices that they claim their phones "should" cost or "would cost if > you bought it without a contract". No, it absolutely DOESN'T cost > $70 if you bought it without a contract. It would cost $17.
> So that $540 Blackberry crap that someone mentioned earlier--that's > just crap, nothing more. It's just a random price they've chosen, > with zero relationship to any real cost of doing business with that > phone.
> Don't worry--just as the banks are getting their comeuppance, so will > the cell providers who play these games.
> Right now, data and smartphones are the hot things. Voice-only phones > are so last year, so you can get them for a song and put them on dirt > cheap prepaid services like PagePlus, and have all the voice service > you can possible imagine. Soon enough, smartphones will go the same > way, and you'll see some realistic prices start filtering through the > system.
> What's so hard to grasp about all of this?
> But before you answer that, first you have to tell us what the real > price of the Samsung Smooth should be--$70 or $17. More importantly, > tell us why, and tell us why it's advertised and available at the > OTHER price.
Elmo-
I visited both the Walmart and Target websites. Neither of them had the Smooth and, in both cases the lowest priced Samsung phone they offered was $40, going up into the $60 range. That would be more in line with Vz's $70 'list price'.
So, I don't know what scam these two 'discount retailers' were running on that Smooth at the time you saw it, but perhaps it's a discontinued model, or perhaps they used it as one of their many 'loss leaders'- items they sell below cost to get people into the store with the hope that they'll upgrade their purchase once inside.
I don't think it's ever fair play to compare prices at stores like the two you've named with other businesses. I don't know how they run their businesses like that but they have been responsible for putting more than one mom n pop store out of business and I believe their business practices are in the grey area.
I also read Larry's post on Pageplus, and their service model seems a little shady to me too. Read the list of 'cons' for yourself and decide if you'd prefer to be left at their mercy if they were the only game in town.
Put in a shortened manner: if you believe that a sophisticated electronic device like a cell phone can be sold at a reasonable profit for $17, then I have a bridge to sell you in Brooklyn.
>>> Starting Nov. 15, Verizon plans to double its early termination fee >>> (ETF) -- to $350 -- for customers who end their cellphone contracts >>> early. The fee, arriving just in time for the holidays, applies to >>> customers who have a smart phone or other advanced device on a one >>> or two year contract. The penalty will decrease by $10 for each month of >>> service >>> completed. If a customer completes five months of service, the >>> penalty would be reduced to $300, for example. >>> The fee, the highest ever imposed by a major carrier, "is insane," >>> says Joel Kelsey of Consumers Union, the USA's largest consumer >>> group. "There's no justification" for a fee that high, he says. >>> "It's punitive to customers who decide to leave Verizon early."
>>> Not so says Verizon. "This has to do with the cost we pay for the >>> device," says spokesman Jim Gerace. Verizon customers, he notes, can >>> buy a subsidized Blackberry for as little as $99. What Verizon pays >>> to Blackberry-maker Research In Motion, however, "is far north of >>> that," he says.
>>> The wireless industry has long subsidized devices to hold down retail >>> costs, then charged customers a penalty if they exited their >>> contracts early. The standard ETF is currently around $175 to $200. >>> It was established years ago, when expensive smart phones, netbooks >>> and other advanced devices didn't exist, Gerace says.
>>> Gerace says ETFs on other Verizon wireless devices, such as standard >>> cellphones, won't change. The current ETF is $175, and it decreases >>> by $5 a month for each month of the contract's term that is >>> completed. Kelsey says he's unimpressed. "ETFs are already too high," he >>> says. >>> "This ($350 fee) is absolutely ridiculous."
>>> Update: Gerace contacted us to point out that all Verizon phones, >>> including smart devices, are available without a contract at a full, >>> unsubsidized, price. But be prepared to pay up. Example: The >>> Blackberry Storm 2. Verizon sells it for $179 with a two year >>> contract and, soon, a $350 ETF. Or you can pay full retail -- $539 >>> -- with no contract or ETF.
>> I don't have a problem with them subsidizing the cost of a device, >> which I'm paying for as part of my monthly service charge, but once >> my two year term is up, unless I get another subsidized device, my >> service charges should go down, as I'm no longer paying for a >> subsidized device, but they don't
> Nobody runs their business that way and neither do you, supposing you have > one. If you're not happy with the rules, either don't play or take the > new phone. Vz is a profit-making company, not a public service. They have > a right to not adjust your monthly rate. Those rules are explained right > up front. Get over it.
It's not a matter of "getting over" anything. Yes, I do run a business, and no, I don't charge my customers for something that I'm no longer providing them. It boggles me that anyone would think this practice is acceptable
> "Carl" <croth...@NOSPAMoptonline.net> wrote in message > news:4af75c30$0$5017$607ed4bc@cv.net... > : Jim_Higgins wrote: > : > Verizon Wireless doubles early termination fee > : > http://preview.tinyurl.com/yg57yz4 > : > > : > Starting Nov. 15, Verizon plans to double its early termination fee > : > (ETF) -- to $350 -- for customers who end their cellphone contracts > : > early. The fee, arriving just in time for the holidays, applies to > : > customers who have a smart phone or other advanced device on a one or > : > two year contract. > : > > : > The penalty will decrease by $10 for each month of service completed. > : > If a customer completes five months of service, the penalty would be > : > reduced to $300, for example. > : > The fee, the highest ever imposed by a major carrier, “is insane,” > : > says Joel Kelsey of Consumers Union, the USA’s largest consumer group. > : > “There’s no justification” for a fee that high, he says. “It’s > : > punitive to customers who decide to leave Verizon early.” > : > > : > Not so says Verizon. “This has to do with the cost we pay for the > : > device,” says spokesman Jim Gerace. Verizon customers, he notes, can > : > buy a subsidized Blackberry for as little as $99. What Verizon pays to > : > Blackberry-maker Research In Motion, however, “is far north of that,” > : > he says. > : > > : > The wireless industry has long subsidized devices to hold down retail > : > costs, then charged customers a penalty if they exited their contracts > : > early. The standard ETF is currently around $175 to $200. It was > : > established years ago, when expensive smart phones, netbooks and other > : > advanced devices didn’t exist, Gerace says. > : > > : > Gerace says ETFs on other Verizon wireless devices, such as standard > : > cellphones, won’t change. The current ETF is $175, and it decreases by > : > $5 a month for each month of the contract’s term that is completed. > : > > : > Kelsey says he’s unimpressed. “ETFs are already too high,” he says. > : > “This ($350 fee) is absolutely ridiculous." > : > > : > Update: Gerace contacted us to point out that all Verizon phones, > : > including smart devices, are available without a contract at a full, > : > unsubsidized, price. But be prepared to pay up. Example: The > : > Blackberry Storm 2. Verizon sells it for $179 with a two year > : > contract and, soon, a $350 ETF. Or you can pay full retail -- $539 -- > : > with no contract or ETF. > : > > : I don't understand what about Verizon's position consumers don't get. > The > : phones are expensive. Verizon subsidizes them if you take a plan, which > is > : by the way, a contract. Not a one-way contract, but one with obligations > by > : both parties. If you want to break your end of the contract, you must > pay > : for the phone. What's so hard to grasp about that? Verizon is not a > public > : service utility. It is a profit-making company. How many of you are in > : business? How many of you have prices and rules only to benefit the > : customers and not your bottom line?
> Correct me if I'm wrong if if I have my own phone I'm still subject to the > ETF.
> No, but you are still paying a monthly fee for a Verizon subsidized phone, > that you don't have.
Elmo P. Shagnasty wrote: > And in fact, the phone is not locked to Verizon's prepaid service. It > may be locked to the Verizon network, but it works just fine with > PagePlus prepaid service. Therefore, the whole "we're subsidizing the > cost so you'll use our service" thing is fishy right from the beginning.
Or perhaps Verizon figures that even if the buyer activates on PagePlus it still means revenue for Verizon (versus the buyer going with a Tracfone, Virgin phone, or prepaid from AT&T or T-Mobile). It's not even clear that over the long term the InPulse customer provides more revenue than the PagePlus customer because the InPulse customer will likely soon realize how expensive InPulse actually is, and churn to another service, probably on another carrier because they're unhappy with Verizon.
> So, Carl, what is the real price of that particular phone--is it $70? > Or is it $17?
> That $70 number that VZW puts out on its web site is just a random > number, with no actual connection to VZW's cost of doing business in any > way. They just decided to price it along the random continuum of prices > that they claim their phones "should" cost or "would cost if you bought > it without a contract". No, it absolutely DOESN'T cost $70 if you > bought it without a contract. It would cost $17.
So few people know about PagePlus that Verizon doesn't worry all that much about people buying the $20 prepaid phones and not activating them on InPulse. Low end GSM phones cost about $20 wholesale, and the CDMA phones are little more because of the lower quantities and the higher royalties to Qualcomm. I expect that Wal-Mart's getting those phones (I've seen the Samsung for as low as $15) for $10-12, so Verizon is certainly still subsidizing them.
> But before you answer that, first you have to tell us what the real > price of the Samsung Smooth should be--$70 or $17. More importantly, > tell us why, and tell us why it's advertised and available at the OTHER > price.
It's still a subsidized price. The buyer of the $15-20 Samsung Smooth is still buying Verizon service, either directly from Verizon, or via a companly like PagePlus.
RBM wrote: > I don't have a problem with them subsidizing the cost of a device, which I'm > paying for as part of my monthly service charge, but once my two year term > is up, unless I get another subsidized device, my service charges should go > down, as I'm no longer paying for a subsidized device, but they don't
That's why if you're planning to stay with the carrier for another two years, as soon as you're eligible you should get a replacement phone that has the greatest differential between the price you pay and the price you can sell it for on craigslist or eBay, and unload it there.
Alas for the smart phones this doesn't work unless you already are paying for service with a data plan because you can't get a smart phone without a data plan any more.
>>>> Starting Nov. 15, Verizon plans to double its early termination >>>> fee (ETF) -- to $350 -- for customers who end their cellphone >>>> contracts early. The fee, arriving just in time for the holidays, >>>> applies to customers who have a smart phone or other advanced >>>> device on a one or two year contract. The penalty will decrease by $10 >>>> for each >>>> month of service >>>> completed. If a customer completes five months of service, the >>>> penalty would be reduced to $300, for example. >>>> The fee, the highest ever imposed by a major carrier, "is insane," >>>> says Joel Kelsey of Consumers Union, the USA's largest consumer >>>> group. "There's no justification" for a fee that high, he says. >>>> "It's punitive to customers who decide to leave Verizon early."
>>>> Not so says Verizon. "This has to do with the cost we pay for the >>>> device," says spokesman Jim Gerace. Verizon customers, he notes, >>>> can buy a subsidized Blackberry for as little as $99. What Verizon >>>> pays to Blackberry-maker Research In Motion, however, "is far north of >>>> that," he says.
>>>> The wireless industry has long subsidized devices to hold down >>>> retail costs, then charged customers a penalty if they exited their >>>> contracts early. The standard ETF is currently around $175 to $200. >>>> It was established years ago, when expensive smart phones, netbooks >>>> and other advanced devices didn't exist, Gerace says.
>>>> Gerace says ETFs on other Verizon wireless devices, such as >>>> standard cellphones, won't change. The current ETF is $175, and it >>>> decreases by $5 a month for each month of the contract's term that is >>>> completed. Kelsey says he's unimpressed. "ETFs are already too >>>> high," he says. >>>> "This ($350 fee) is absolutely ridiculous."
>>>> Update: Gerace contacted us to point out that all Verizon phones, >>>> including smart devices, are available without a contract at a >>>> full, unsubsidized, price. But be prepared to pay up. Example: The >>>> Blackberry Storm 2. Verizon sells it for $179 with a two year >>>> contract and, soon, a $350 ETF. Or you can pay full retail -- $539 >>>> -- with no contract or ETF.
>>> I don't have a problem with them subsidizing the cost of a device, >>> which I'm paying for as part of my monthly service charge, but once >>> my two year term is up, unless I get another subsidized device, my >>> service charges should go down, as I'm no longer paying for a >>> subsidized device, but they don't
>> Nobody runs their business that way and neither do you, supposing >> you have one. If you're not happy with the rules, either don't play >> or take the new phone. Vz is a profit-making company, not a public >> service. They have a right to not adjust your monthly rate. Those >> rules are explained right up front. Get over it.
> It's not a matter of "getting over" anything. Yes, I do run a > business, and no, I don't charge my customers for something that I'm > no longer providing them. It boggles me that anyone would think this > practice is acceptable
We'll agree to disagree. You don't know that they're charging you for something that they're no longer providing. You don't know that the cost of the 'free' phone plus the service is fully covered within a brief 24 month period. You're only assuming that. Perhaps the way it works is that the provider depreciates the cost of the phones over a much longer period of time and relies on old customers remaining loyal to the company in order to support the new ones who come in and take the free phones. The point is that you don't know, not whether my supposition is right or wrong. Until we do know, we should lose the hostile attitude towards the "company". If you are in business for yourself, you should know that there are variables that customers and non-business owners don't factor in. I'll bet you have to defend your prices all the time. I know I do. And as long as I have to defend my prices, I will always give the benefit of the doubt to the other guy.
Elmo P. Shagnasty wrote: > In article <4af7fb99$0$22524$607ed...@cv.net>, > "Carl" <croth...@NOSPAMoptonline.net> wrote:
>> Put in a shortened manner: if you believe that a sophisticated >> electronic device like a cell phone can be sold at a reasonable >> profit for $17, then I have a bridge to sell you in Brooklyn.
> You are as dense as the sun.
I'm a fairly successful business person for a dense one, Elmo. I'd like to see if the same is true for you. Resorting to name-calling doesn't speak well for you.
Carl wrote: > I visited both the Walmart and Target websites. Neither of them had the > Smooth and, in both cases the lowest priced Samsung phone they offered was > $40, going up into the $60 range. That would be more in line with Vz's $70 > 'list price'.
If you go to the store, the Samsung Smooth is regularly available for $20, and I've seen it as low as $15. Also sold at Walgreen's for around $40. Probably Verizon is wholesaling it these stores for $10 or so.
> I also read Larry's post on Pageplus, and their service model seems a little > shady to me too. Read the list of 'cons' for yourself and decide if you'd > prefer to be left at their mercy if they were the only game in town.
LOL, they're one of the oldest players in prepaid, if among the least well known.
> Put in a shortened manner: if you believe that a sophisticated electronic > device like a cell phone can be sold at a reasonable profit for $17, then I > have a bridge to sell you in Brooklyn.
Verizon knows that most buyers of their prepaid phones will be activating them on InPulse. Even the prepaid phones are subsidized. For those few people that know about PagePlus, and know that the InPulse phones can be used on PagePlus, Verizon still eventually gets revenue from those sales as well since PagePlus is buying minutes and MB at wholesale prices from Verizon.
Elmo P. Shagnasty wrote: > The point is, there is ZERO relationship between VZW's cost of acquiring > the device and the various prices that VZW itself "sells" the device for.
Many businesses sell the same product for wildly different prices depending on the distribution channel. They depend on customers not knowing how to purchase the products through the least expensive channel.
> And they both sell various parts of their business at whatever price > they can get at any given time, regardless of anything else. The price > the customer pays is dependent solely upon the deal the customer can > negotiate, and everyone's deal is a little different (and sometimes a > lot different).
As with cars, houses, appliances, airline tickets, hotels, etc.
The bottom line is that there was a loophole for the devices like the Droid. You could sign up for service, obtain a Droid, then cancel and pay $175 ETF and have a Droid for about $400, which is probably about what Verizon pays Motorola for one.
With a $350 ETF it would cost you about $600 to acquire a Droid in this manner.
Of course Verizon's customers are free to buy handsets without a subsidy at all, in which case there is no ETF at all. And while InPulse prepaid phones can be used on PagePlus, I don't think Verizon still allows them to be used on Verizon postpaid accounts.
Personally I think that the $350 ETF is going to backfire on Verizon and result in lost sales and customers to carriers that sell smart phones without such a high ETF.
Elmo P. Shagnasty wrote: > VZW is putting random prices onto the same phone under different > circumstances, because the price of the phone has nothing to do with > anything. It's all about getting people to use the service.
The price of the phone has _everything_ to do with getting people to use prepaid services.
The prepaid buyer isn't going to pay $70 for a prepaid phone when there are phones on the rack for $20 that have airtime prices that are comparable to InPulse.
PagePlus throws a monkey wrench in there by offering far better airtime prices than InPulse, with service that works on the highly subsidized InPulse phones. For the minimal user of PagePlus, paying $2.50/month, it would take many years of use for Verizon to make back the subsidy via the wholesale airtime revenue they get from PagePlus.
One of the reasons PagePlus has remained a niche player is because they don't have phones for sale on the rack at Target, Wal-Mart, and Walgreen's. Nor is there anything on their web site that advises potential customers to go pick up an InPulse phone to use on their service.
>> It's important that if you buy a new Verizon InPulse handset to use >> on PagePlus that the store NOT activate it by scanning the bar code >> on the package that reads "SCAN BARCODE BELOW FOR ACTIVATION." This >> will begin the activation process on Verizon InPulse
> That's pure and utter bullshit. Some guy gets some random thought in > his head, and next thing you know he's set up a web site (John Navas > comes to mind here).
>> I read with amusement a claim by someone that the PagePlus revenue >> model is based on users losing their account balance by forgetting to >> re-up their account every 120 days. While this claim was ludicrous
> No one ever said that their ENTIRE revenue model was based on stupid > people forgetting and forfeiting their minutes--but the fact is, they > do count on that happening and it is a part of their revenue plan.
> Again, some lunatic just puts random crap on a web site and thinks > he's a hero. Great job.
So, Elmo, tell us the truth about activating an InPulse on PagePlus to CORRECT his method....instead of the usual trashing of the messenger.
How do you buy a cheap InPulse and put it on PagePlus, Elmo. I'm sure everyone interested would like to know the CORRECT, according to you, way.....