Verizon Communications Inc. (NYSE:VZ) has announced that it is introducing a $30 fee on customers who wish to upgrade their wireless contract or equipment on the national US carrier. The company will begin to charge the upgrade fee on April 22nd. The move has been expected as wireless carriers move to insert fees on their users in order to cover the costs of wireless devices they subsidize and the costs of upgrading their services to new wireless standards.
Verizon was up until now the only large national carrier in the United States that hadn’t charged a wireless fee for upgrades before this. AT&T and Sprint, who make up the top three of the largest carriers, both charge $36 for the service while the nation’s fourth carrier T-mobile charges $18 for an upgrade. Verizon says that the fee is necessary for the company to maintain its level of service when giving discounted cell phones to its users on a two year contract.
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Whether or not customers will react poorly to the move remains to be seen. The new pricing brings the company roughlyu in line with the other carriers who offer a similar service and might reduce the demand gained from impulse from customers renewing contracts to get an upgraded phone. It is an expensive time for wireless carriers in the United states. The introduction of $G by some carriers and the need for it on several wireless devices leaves the industry in a state of flux. The massive capital needed to create the updated network has put some stress on the companies in the market most notably Sprint. Their investment in a deal with Lightsquared has left them without likely 4G capability for some months.