The Verizon Edge plan is the latest program aimed at luring customers who do not want to wait the required 2-years to upgrade their phone or tablet. Shortly after T-Mobile introduced JUMP, AT&T followed with Next and now Verizon has EDGE. The common denominator is the ability to go contract free and upgrade early. That’s where the similarities end. Verizon’s EDGE requires no downpayment, instead requiring customers pay their device off in 24 installments. They are afforded the option to update every 6 months and/or when fifty percent of the retail price has been paid.
Prior to this new wave of plans, customers would pay roughly $200 for a premium smartphone and the required 2-year contract agreement includes subsidies that help offset the remaining cost of the handset. AT&T and Verizon do not disclose the amount. When you sign up for Next or Edge, they are effectively double-dipping. If you opt for a smartphone that retails for $650, your monthly cost would be $27.08. In six months time, your out of pocket is $162.48, plus your wireless contract fees. To become eligible for an upgrade, you need to pony up an additional $162.52 totaling $325 plus your old phone. This all for the privilege of starting the whole process over again. If you decide not to upgrade over the course of your contract, you’ve effectively paid for the device, plus the subsidy. If Verizon sells you a $650 phone for $200, one would assume they make they make that up in fees over the course of your two-year contract. When you opt for Edge, you don’t receive that $200 credit.
Even the ETF (early termination fee) is a better option. If you pay $200 for the phone and break your contract after six months, you’d pay a $290 ETF. That’s a total of $490, but you can easily offset that by reselling your device. In most cases, you could easily call it a wash and possibly even cover the amount needed to offset the price of a new smartphone with a new 2-year agreement.
T-Mobile was on to something with the Jump plan. Verizon’s Edge and AT&T’s Next are similar in that they offer early upgrades. That’s where the similarities end. Both are double dipping, making these the most expensive and non-consumer friendly options available. You can sign up at Verizon to receive offers for Edge.