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Verizon Drops Mandatory Contracts

What if you didn't have to get tied to a nasty contract for a phone?
(Image copyright Jeremy Duffy)
Brilliant:
First off, Verizon is doing away with contracts under certain conditions. Let's face it, contracts are for cowards. Carriers had to default to them because of the industry's spotty record of customer service. It was their way of preventing you from fleeing.
That aside, the news is that Verizon has decided to no longer force contracts on people who already have a Verizon phone and will only use them when people want to buy a phone at the subsidized rate (in other words, those penny phones that actually cost several hundred dollars). It's hard to believe that a company like Verizon would do such a thing, but the Wall Street Journal confirms it. They say that there will be an activation fee, but no termination fee. Finally! Tags: , ,

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4 Comments to “Verizon Drops Mandatory Contracts”

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Christopher Ray says:

This truly is a groundbreaking moment in the industry. Month-to month contract options will not only provide another great option for consumers, but allow the company to tap an additional market to add to its industry-leading 65 million customer base.

This is, however just one more of the changes Verizon Wireless has made in direct response to its Net Promoter Score customer feedback program and their commitment to providing world-class customer service.

As a result of this program, Verizon Wireless has already implemented several initiatives such as sooner upgrade dates (20 months instead of 22), annual upgrade options, prorated early termination fees, and unlimited calling plans.

The only thing in this article that I take issue with is the supposed reason for service contracts. The actual reason is to justify the deep subsidization of equipment. For example, a phone that may cost the carrier $400 could be offered to a customer activating with a two-year contract as low as, say, $150. This is a $250 subsidization. If this customer is on a $40 calling plan, it takes the carrier nearly 4 months just to make back the initial loss on the phone, not to mention paying the staff that sold the phone to the customer.

Hopefully, this gives a more complete explanation of the reason for contracts to the readers.

“Verizon has decided to no longer force contracts on people who already have a Verizon phone and will only use them when people want to buy a phone at the subsidized rate (in other words, those penny phones that actually cost several hundred dollars).”

I think the article covers it just fine. Jeeze man, pay attention πŸ™‚

Christopher Ray says:

Actually, I was referring to the section above that which states:

“First off, Verizon is doing away with contracts under certain conditions. Let’s face it, contracts are for cowards. Carriers had to default to them because of the industry’s spotty record of customer service. It was their way of preventing you from fleeing.”

So, Jeez yourself….. πŸ™‚

Obviously there were contracts for cases other than subsidizing phones. Since you don’t buy the quoted reason above, what justification would you offer for it?

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