Verizon Braces for Installment-Plan Impact After AT&T Surge
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Verizon Communications Inc. is preparing for its own surge of customers opting to pay for smartphones on installment plans, threatening to shrink monthly wireless bills.
Like AT&T Inc.’s Next plan, Verizon’s Edge service sells smartphones at full price instead of giving discounts in exchange for two-year subscriptions. While the new model gave AT&T a spike in device sales last quarter, customers using Next will have lower monthly bills than subscribers on contracts, potentially squeezing margins. While Verizon said the impact of Edge, introduced in August, was “minimal” in the first quarter, it is likely to be more pronounced in the future.