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Verizon device upgrade programs set for price hike

A report from Phonearena.com suggests Verizon is set to increase upgrade fees nearly across the board, including annual upgrades and full payments

Verizon Wireless is reportedly set to increase or initiate upgrade fees for customers switching devices, regardless of how they acquire a new device.

According to a screenshot posted by Phonearena.com, Verizon Wireless beginning April 4 will begin charging customers a one-time $20 fee if they activate a new device on their current line of service. The fee will be charged for customers purchasing a device outright, going through Verizon Wireless monthly device payment program, upgrading a device at least one year into a two-year payment program, or customers upgrading their device through Apple’s payment program. Customers on a two-year service contract will continue to be knocked $40 if they upgrade their device.

The only customers not docked for an upgrade appear to be those bringing their own device to the carrier.

Verizon Wireless currently does not charge an upgrade fee for customers on a monthly payment plan or if customers pay the full price upfront for their device. The carrier last year did away with offering two-year service contracts to customers, instead only allowing new customers to either purchase their device outright or signing up for a monthly payment plan. In return for giving up that device subsidy, Verizon Wireless adjusted the per-device fee tied to the carrier’s monthly rate plans.

Customers signing up for a new line of service are currently charged a $20 “activation fee,” which the carrier has said it used to offset work required to activate a line of service. These fees are often compared with “resort fees” charged by hotels in that they allow a company to plan for a set revenue stream regardless of how much a customer ends up paying for a device or hotel room.

Wireless carriers have also been struggling to rebalance their finances to the approval of the investment community connected with the move away from device subsidies tied to service contracts and towards monthly device payment programs. Sprint has gone so far as to set up a separate device leasing division it has begun to use to loan money back to the carrier.

Verizon Wireless earlier this month added Samsung’s latest Galaxy S7 smartphones to its Annual Upgrade Program, which allows customers to trade in their phone for a new model after 50% of the device is paid for through its monthly payment plan. The yearly upgrade program began last September tied to the launch of Apple’s iPhone 6s models.

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