Verizon continues to grow, despite complaints from some customers
Verizon has shown strong earnings in its first-quarter report, but it is also facing criticism from a growing number of customers who want their contracts eliminated.
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Mr. Beauchamp points to other carriers trying to change the way they sell their devices, such as Google and T-Mobile. Google sold a unsubsidized phone to the public without a contract. T-Mobile also changed their plan and pricing models so that customers pay the full price of the phone (closer to $600 than the common $99 price tag) in monthly installments. Those who want to leave T-Mobile have the option to do so, as long as they pay off the phone.Skip to next paragraph
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While the petition has gained some attention, Forrester Research analyst Charles Golvin notes that so far the petition’s backers account for 1 percent of Verizon’s customer base, assuming all of the supporters are Verizon customers. Some of these customers may be among those who want both cheap phones and a contract-free purchase, without realizing that the contracts and service fees are subsidizing the price.
“I think you can have a viable argument about whether those charges are fair or not, or whether they’re gouging and trying to maintain or restrict switching off their customers,” Mr. Golvin says, "but the larger picture is all of the U.S. carriers trying to ween customers off this impression that the phones cost $100 or $200 and make more visible the actual cost of the device."
The petition does address the pricing models, including how T-Mobile users pay full price for their phones in monthly payments. However, Golvin says this points to a larger issue with carriers. At this juncture, they have the task of making known the real price of the phones they’re offering.
“It’s a larger dynamic in the U.S. wireless industry these days where Americans are conditioned to believe that phones have an unrealistically low price because they are subsidized by carriers,” he said.
Despite the complaints, Golvin says, it is unclear as to if Verizon will make any changes to its contracts or restrictions to appease those customers. It will depend on whether or not the petition can rally a majority of Verizon customers.
“If they are sufficiently unhappy with the contract requirement, I think Verizon will respond,” he says. “So far, it seems like despite whatever dissatisfaction, the overall numbers are still very much in Verizon’s favor.”
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