BUFFALO, NY- If you're a Verizon Wireless customer looking to upgrade your phone, you should do it fast or you're about to be slapped with a huge fee.
The nation's largest cellphone company announced Wednesday that on April 22 the company will start charging a $30 fee every time a subscriber wants to upgrade to a new phone with a two-year plan. Verizon Wireless says the new fee will help fund customer support and online educational tools.
Verizon is just the latest cell phone carrier to charge the upgrade fee. It's more than the $18 charged by T-Mobile, but less than the $36 upgrade fee charged by AT&T and Sprint.
Two on Your Side SKYPED with Consumer Reports Sr. Editor for Electronics Mike Gikas who says this latest fee is unreasonable, especially with texting, data, and all its other fees. "Over the cost of the contract the consumer can be expected to pay $2000 to $2400 in service fees to the carrier," said Gikas.
Consumer Reports annual survey of more than 50,000 to 60,000 readers found that Verizon Wireless is one of the better carriers with excellent service, and the coverage is good. But Gikas says the survey found Verizon Wireless is expensive and they are the "Cadillac of services."
The highest scoring carriers are smaller- Consumer Cellular and US Cellular. But for low-cost alternatives Consumer Reports recommends pre-paid plans. "T-Mobile, for example, has a very good pre-paid plan with smartphones. Some of the cheapest around," said Gikas."
For heavy data users, Consumer Reports says Sprint might be the best way to go. "For one flat fee they'll include unlimited texting, unlimited data, they have a lot of new marquee phones," Gikas said.
Verizon is introducing the fee as cellphone companies are seeing their profits cut by the cost of subsidizing smartphones, especially iPhones.
Smartphones generally cost hundreds of dollars more than they sell for in stores. Wireless carriers count on making the money back through service fees over time, but those fees aren't growing as fast as smartphone sales.
The following is a statement Verizon Wireless sent Wednesday to Two On Your Side:
"On April 22, Verizon Wireless is implementing a $30 upgrade fee for existing customers purchasing new mobile equipment at a discounted price with a two-year contract. This fee will help us continue to provide customers with the level of service and support they have come to expect which includes wireless workshops, online educational tools, and consultations with experts who provide advice and guidance on devices that are more sophisticated than ever.
While the upgrade fee is not unique to Verizon Wireless, most devices can be traded in with our green friendly trade-in program at www.verizonwireless.com/tradein as a way to save money or potentially offset the fee completely."