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kpinvest (70.63)

VZ Ups ETFs

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November 04, 2009 – Comments (5) | RELATED TICKERS: VZ

In a rather interesting move Verizion WIreless has decided to increase their Early Termination Fees (ETF) to $350 for "Advanced Devices".

http://www.engadget.com/2009/11/04/verizon-looking-to-bump-early-termination-fee-to-350-on-advanc/

Mmmmm, profits. A lot of the industry has decreased their ETFs. AT&T started back in May of 2008, saying that for each month the ETF would decrease by $5.

VZW also will introduce tethering to DROID phones starting early 2010:

http://www.engadget.com/2009/11/04/droid-tethering-its-coming-early-2010-says-verizon/

This is really good news, since the iPhone does not allow tethering. Tethering is the process of hooking up your mobile phone to your laptop and being able to access the internet using your device. This eliminates the need for a PC wireless card, and saves on a bill that you probably don't need at all. That is, of course, if you're like this guy and rack up an $11k bill (it was his cell, but the same rates would apply). Now, if we can get the iPhone to VZW in '10, then I'll be one happy camper next year.

Time to stock up on VZW! Nyuk nyuk.

 

5 Comments – Post Your Own

#1) On November 04, 2009 at 2:58 PM, Gemini846 (91.07) wrote:

VZ(w) does prorate their early termination fees. It doesn't surprise me with passing out 2 for 1 blackberries that they would double the ETF to cover those costs.

Think about it this way. If I buy a data phone I'm forced into a plan +$30 a month for a data plan. The cheepest plan is like $100. If the ETF is only $175 its no fee because I just basically paid 2 months of the bill and got out of the other $2200 and sold my old VZ phone on ebay.

I'm about 2 months from being contract free. I've been with them for 9 years and I've never questioned renewal until now.

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#2) On November 04, 2009 at 3:09 PM, ChrisGraley (99.71) wrote:

Relying on broken contracts for greater revenue is not a sustainable business model.

I'm not saying not to buy VZ, but I wouldn't buy them for higher ETF's.

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#3) On November 04, 2009 at 3:12 PM, leohaas (99.29) wrote:

Interesting take.

I am not sure that increasing Early Termination Fees is such a good idea. It is definitely not customer-friendly...

By the way, the company only owns 55% of VZW (the other 45% is owned by Vodafone). But VZ also has its increasing FiOS base. If only I lived in an area where that service is available, I would have switched a long time ago. My choices are now limited to a cable company (no good: they are not used to competition, so their customer service s*cks), and DSL combined with satellite (no good either: DSL is only availabe if you live close to the central office and is relatively slow; satellite loses signal during severe rain and snow storms).

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#4) On November 04, 2009 at 4:10 PM, blake303 (46.24) wrote:

I agree with Chris and Leo on the termination fees. Not a good signal.

The bigger issues are the probability of VZ getting the iPhone and how much market share DROID can capture. If you think one is a clear winner, it may be better to just invest in AAPL or MOT. I'm not an expert on any of these companies or devices, but have been looking at VZ lately because the dividend is attractive and my portfolio is too heavily weighted in commodities.

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#5) On November 04, 2009 at 4:23 PM, kpinvest (70.63) wrote:

Thanks for all the feedback :)  I didn't really think about it as a bad thing, I see it more as a company hires someone, issues a blackberry, the person leaves and then said company terminates the contract.

But, after I read your points, this probably isn't that great of a thing for individual consumer. Squeezing juice out of turnips isn't always productive as it sounds.

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