For those of you who always enjoy having the latest handset, Verizon (NYSE:VZ) is putting a block in your way: the nation’s largest carrier is ending its early upgrade subsidies program, meaning if you want the device before your two year contract is up, you will have to pay full price.
Users used to be able to get a new handset for the subsidized price at 20 months, but by tagging on four additional months, Verizon is therefore able to save money by handing out fewer subsidies. The company sometimes has to drop the price of smartphone hardware by as much as $400, just the give the consumer a price in the sub-$200 area.
According to its website, Verizon is trying to move its upgrades to be more in line with how consumers buy their phones and to sync up with the typical length of the contracts, the AP said. The change takes effect with contracts that expire in January of 2014, meaning Verizon users who are at 20 months come September can still upgrade, but anyone after that has to wait the 24 months.
In addition to saving Verizon money, it is also reflective of a growing trend of more expensive handsets, and it is not the first time Verizon has extended its subsidy period. Before 2011, subscribers needed only wait 13 months before being blessed with an upgraded opportunity. The 20 month waiting period was issued just before it launched Apple’s (NASDAQ:AAPL) iPhone, one of the most expensive handsets on the market.
AT&T (NYSE:T), the second largest carrier behind Verizon, also has a 20 month upgrade delay. However, only time will tell if it too will feel the pinch from the deeply discounted devices.
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