Verizon Insists Higher Phone Upgrades Are Being Used To Enhance The Network Instead Of Make Up Revenue Decline

Wireless

from the uh-huh dept

Within Karl Bode’s post about Verizon’s insistence that all of the people who continue to use grandfathered unlimited data plans don’t actually exist was a brief note about the company’s decision to increase the cost to upgrade the phones themselves. As mentioned in the post, Verizon claimed that the reason to push upgrade costs from $20 to $30 was due to increasing costs. Fleshing that out a tiny bit, a Verizon spokesman commented for Ars Technica.

When asked why the upgrade fee was raised, a Verizon spokesperson told Ars, “These fees help cover increased cost to provide customers with America’s largest and fastest 4G LTE network.”

As both Karl’s and the Ars post note, there’s a bit of a problem with this statement. Verizon’s earnings reports are publicly available, you see, and the company’s own reporting details a fairly significant decline in operating costs compared with the previous year. So, what was sold as a need to make up for increased expense appears instead to be something else. Once the post went live, another Verizon spokesman reached out to Ars again.

After this story published, Verizon responded that it was referring to “ongoing costs to maintain and enhance the network,” but did not provide any further details.

Making the additional comment rather useless, I would say. We still have source material in the form of Verizon’s own financial statements that suggest lower expenses for the company, not higher. What you do find, in addition to that, is a slightly smaller decline in revenue. It would make some sense for the company to try to make up for a revenue decline by raising upgrade fees. If that were the case, however, why not just say so? Why instead invoke the expense and the spectre of the future without anything concrete to back that up? It’s not like the telecom industry has some sterling reputation when it comes to how and when it deploys the cost of maintaining or upgrading their networks as the reason to take certain actions. And why on the one hand charge extra fees to burgeon the network while at the same time eliminate data plans that could take advantage of a beefed up service?

The only thing that’s certain in this is that Verizon appears to be dipping ever-further into tactics that are designed not to provide its customers with additional value, but to instead merely prop up a decreasing revenue number.

Filed Under: costs, network, revenue, upgrades
Companies: verizon