As if wireless plans are not complicated enough already, Verizon decides to throw in an additional fee on top of the other fees that customers have to pay for when subscribed to a Verizon plan.
Big Red has confirmed to CNN Money a report first made by Droid Life, saying that the company will indeed start charging an additional one-time $20 activation fee for all customers who sign up for one of Verizon's contract-free device payment plans beginning Nov. 15, the same day the carrier will start charging users an additional $20 for unlimited data.
Sources for Droid Life say the activation fee will be charged only for new device payment plan sign-ups. Existing customers will not be asked to pay the fee, while customers on Verizon's grandfathered unlimited plan will still have to pay $40 to add a new line to their service. This is on top of the additional $20 Verizon will start charging on Sunday.
Verizon spokesperson Kelly Crummey says the activation fee will pay for the costs of activating a line, including "communicating with the telephone registry service that your SIM card should be associated with your phone number."
However, at least one analyst believes charging customers an additional $20 will net the company a considerable amount in new revenue come next year's earnings report. Colby Synesael, analyst at Cowen & Co., expects Verizon to add another $189 million in revenue and $122 million in profit from the additional fee. This year, Verizon posted $33 billion in revenue in the third quarter, with a 10 percent rise to $4.2 billion in profits.
Verizon announced in August that it was waiving the $40 activation fee that new customers signing up for a two-year contract plan had to pay to have their SIM cards automatically activated on Verizon's network. This came as the company stopped offering subsidized smartphones, forcing customers into 24-month device payment plans that require them to pay for the full cost of the smartphones.
For an unspecified reason, however, Verizon seems to have changed its mind about charging an activation fee. Its competitors, in fact, also charge customers to have a new line activated. AT&T, for instance, charges $45 for customers signing up to two-year contract plans and $15 for customers on its Next device payment plans. Sprint has a $36 activation fee. T-Mobile calls it a SIM starter kit, a fancy name for the $15 activation fee it charges customers.
