FCC Not Satisfied with Verizon's ETF Explanation
Question of the year.....
to paraphrase, if vzw loses money when a customer cancels in the 23rd month, how do they make money when a customer upgrades to another device in the 23rd month or before? Vzw's argument makes no sense at all......
To rephrase.....if Verizon doesn't make money until the 23rd month on smartphones, then they don't make money until customers keep their phones longer than 2 years......so why do they allow customers to upgrade after just 18 months? its a mystery.
On the first, basic marketing life cycle. It is always more cost effective for any business to retain an existing customer then to attract and add a new customer.
On the second, note the carrier focus on expanding existing single user accounts to multi-line with BYGO deals and reduced fees for the additional lines of service as well as new subscriber equipment pricing... Don't forget that elusive contract expiration date which will have different contract expiration dates. Even if the primary account holder wanted to jump ship to a different carrier for whatever reason, the additional obstacle of multiple carrier bills or having to face the carrier's ETF on in-contract lines to make a cl...
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FWIW, I'm not in the pro-VZW camp, and personally consider the 23+ months VZW claim to be a straw dog... but OTOH there is very sound logic for any carrier to encourage early upgrades, even if done at a loss on an individual line.
IMO it's more likely VZW is feeling the pain of their newer Wal-Mart class clients that migrate from 2nd tier carriers, then take their ...
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So if you cancel in the 23rd month, it's like not making a loan payment.. they made more back than how much they lent you, but on the books, they are still losing money because they are missing that last payment.
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