By Scott Moritz and Alix Steel
From Bloomberg News
Verizon Communications Inc. under pressure from its wireless competitors, offers free Apple and Android phones to customers who sign up for unlimited plans in its faster 5G network.
The largest U.S. wireless service provider, which once had a chance to give money to existing customers, now matches similar trade-in offers from AT&T Inc. and T-Mobile US Inc. – part of the effort to prevent recent subscriber losses.
As of Tuesday, new Verizon customers who have opted for a premium 5G-unlimited plan may be eligible for as much as $ 1,000 credit for an Apple iPhone or $ 1,100 for the Samsung Galaxy S21. Current customers are eligible for $ 700 towards an iPhone or $ 800 for an Android model if they move to an unlimited plan with higher prices.
“We do it very strongly,” Ronan Dunne, head of Verizon’s consumer group, told Bloomberg Television. “We have a wide range of choices for customers.”
Verizon lost 178,000 phone customers in the first quarter. In the same period, AT&T added 595,000 subscribers and T-Mobile led the group with 773,000 new phone customers.
The gift is aimed at reviving the growth of subscribers, as well as attracting customers into 5G unlimited plans for higher prices. The more customer traffic Verizon can move to its new, largely empty 5G networks, the less pressure its 4G and 3G systems have.
The 5G race is warming up. U.S. airline executives have spent billions of dollars on airwave licenses, building 5G wireless networks that promise 10 times faster than current connections. T-Mobile has a one-year or more lead on 5G coverage after acquiring Sprint Corp. and obtained its trump of mid-band airwaves.
Meanwhile, AT&T is wiping out its WarnerMedia division and will use part of the $ 43 billion in cash from the deal to expand its 5G network. The service provider has been the most aggressive with phone pricing, giving away new Apple Inc. iPhones and Androids to new and existing customers upgrading their plans.
Verizon first launched 5G, but its ultra-fast connections ride on pesky millimeter waves that do not move far or move through leaves and glass. The company offers nationwide 5G service, but its super-fast 5G experience is only available in limited areas within 75 cities, 13 airports and more than 60 arenas.
While offering technically unlimited service, AT&T and Verizon are both speed-connection speeds after customers reach certain data packets or when their networks are overcrowded. T-Mobile boasts of the fact that it never limits the speed of its unlimited customers. Plans can cost up to $ 90 a month.
The phone deals are a bit of a setback. A decade ago, free devices were a common way for carriers to lock customers into two-year contracts. Today’s offers offer credits on monthly device payments spread over two years or longer. Payments of customers who have been with the service for two years are covered. Those who leave, on the other hand, are on the hook for the remaining telephone payments.
Dunne sees signs that the economy is growing based on store activity and traffic patterns on the network indicating that people are moving to pre-pandemic levels again. “We want to contribute to getting the country back on track,” he said.
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