Key Takeaways:
- Verizon will add a $2 monthly tax to nudge people from older plans to new ones.
- The company’s tax move is also in response to 2023 earnings estimates coming in below expectations due to the telecom slowdown and 5G costs.
- It experienced growth over the recent holiday season.
WISCONSIN (CoinChapter.com) — Some of Verizon Communications, Inc.’s earlier unlimited cell phone plans will now be subject to a new fee. The biggest carrier in the country is actively promoting its most current unlimited plans.
Verizon is imposing a new $2 tax on some of its older unlimited plans. The new charge, which the provider refers to as a “rate plan adjustment,” will apply to customers on several unlimited plans, including Beyond Unlimited (and its age 55 Plus variant), Go Unlimited, and the previous Verizon Unlimited plan.
Consumers will start receiving e-mails, physical mail, and notes on their forthcoming March invoices informing them of the increased price. Starting with April invoices, the new price will apply, which will be $2 per line/month.
According to a Verizon representative, that charge is “to pay for the additional expense of sustaining these outdated programs.”
While Verizon Unlimited was first announced in 2017, the Go and Beyond plan was only released in 2018. In addition, the carrier’s current unlimited plans do not include new surcharges.
As Verizon attempts to nudge people toward its more recent plans, extra taxes or pricing increases on older contracts are nothing new. For example, the carrier raised prices for its earlier shared data plans separately from adding additional “economic adjustment charges” to its customers’ bills last year.
Verizon Earnings Expected to Fall in 2023
Part of Verizon’s $2 tax move is due to projections that 2023 earnings will be below expectations due to the telecom slowdown and 5G costs.
Verizon used to be a former market leader in postpaid consumers but had a decline in subscribers last year due to their two fast-growing competitors, AT&T, Inc. and T-Mobile, which offered more cheap plans and superior 5G networks.
The company’s stock, a part of the Dow Jones Industrial Average, was also severely damaged by subscriber loss; investors and analysts expressed concerns about a return to growth in the face of fierce competition. Last year, Verizon shares underperformed the benchmark.
Verizon experienced some growth over the recent holiday season thanks to aggressive promotions and trade-in offers, adding 217,000 new monthly bill-paying members in the fourth quarter. But that was still less than half of the 558,000 new clients the business acquired over the same period in 2017.
