If you’re a Verizon customer, then you’re probably aware that you pay an upgrade fee whenever you purchase a new device and switch to it or if you get one through the carrier’s device payment program. Previously, it was just at $20 but starting January 5, they had a fee increase and now you will have to pay $30 to “help cover increased cost” that the company supposedly shells out to provide better coverage for their customers.
However if you actually look at the wireless capital expenditures of Verizon, it has actually decreased, according to the latest earnings report. So the reason for the increase in the upgrade fee, if it’s to cover the supposed expenses, may not be valid. In the 3rd quarter of 2016, they only spend $2.77 billion, down from the same period last year. When it comes to revenue though, there was also a slight decline, which may be the actual reason for the fee increase.
But Verizon clarified that the ten dollar increase was to cover “ongoing costs to maintain and enhance the network,” and not for future increases. Verizon’s CFO previously said that they are spending for LTE densification in order to accommodate streaming video, which has seen an increase the past few years. In fact, they are already preparing for two years in advance as they expect a steady increase of LTE activity in the next few months.
Aside from the now $30 upgrade free, Verizon has also stopped renewing two-year contracts and even device subsidies to existing customers. They have already previously stopped this for new customers and so now everyone’s basically on the same boat.