FCC Not Satisfied with Verizon's ETF Explanation
Question of the year.....
https://www.phonescoop.com/news/discuss.php?fm=m&ff= ... »
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 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......
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Very good point! You are the voice of reason out of all of the comments posted here. I was wondering the same thing....me thinks that VZW is trying to justify the extra fee...but the numbers don't add up
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.
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.
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1) Customer retention, and 2) secondary sales
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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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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Your second point is irrelevant to the discussion -- no one mentioned multi line customers. Your first point may be true, but still irrelevant. If customer retention is the reason, then in effect what your saying is Verizon still does not make money until they've retained a customer for something beyond 2 years. This conflicts with ETF's ending after 2 years. So bottom line Verizon, which is it?, because you can't have it both ways.
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Reread the post I was responding to, and apply it to the 'typical' subscriber who happens to be in most cases multi-line rather then single line. You are technically correct, the OP didn't mention multi-lines specifically, but it's implied if looking for the reason it's both allowed and encouraged by all of the carriers, and it has a direct impact on account retention. 🙂
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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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 ...
(continues)
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It's all about how they look at it in the books. Most likely when you pay them, the portion that doesn't go to network/paying for your use on it is divied up. A portion goes towards paying off the phone subsidy, and the rest (like interest) gets invested into the company.
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.
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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