Verizon sees Edge adoption doubling as it expands retail availability
The company already says Edge adoption is running above expectations, although it didn't disclose any numbers.
- SABEW Best in Business 2011 Award for Breaking News Coverage, Eddie Award in 2020 for 5G coverage, runner-up National Arts & Entertainment Journalism Award for culture analysis.
Verizon said on Thursday that it plans to expand its Edge monthly installment and upgrade program to its retail partners this quarter.
The company expects the adoption rate of Edge to double in the second quarter as retail availability widens, according to Chief Financial Officer Fran Shammo, who spoke to investors on a conference call following its first-quarter earnings report.
Verizon's Edge program is a critical component to the company's defense of its customers from rivals such as AT&T and T-Mobile. The program lets customers pay for their phones bit by bit each month and allows them to upgrade earlier than the typical two-year cycle, all in exchange for a lower monthly service fee. It's a comparable program to what the other carriers offer, and is part of a broader shift in how consumers are paying for their wireless service.
Shammo said Edge was running above expectations and said the numbers represented a sequential increase over the fourth quarter. But it was just a start, with Edge customers making up only 2 percent of its smartphone base, he noted.
Verizon's results showed a loss of basic and 3G phone customers as T-Mobile and AT&T stepped up their competitive pressure. But Shammo said the actions taken later in the first quarter helped stabilize its base, and he said he saw improvement in March.
While Edge is just getting underway with its expansion, AT&T h as been touting the success of its own program, Next. On Tuesday, AT&T Chief Financial Officer John Stephens disclosed that 40 percent of its smartphone gross customer additions and upgrades went through Next, with 1.1 million customers opting for the program in the period.
AT&T helped spur the adoption by allowing existing customers to move to Next regardless of when their contracts expired. The carrier has been more aggressive in moving them to the installment plans.
Verizon isn't taking the same tact, and isn't looking to provide incentives to move to Edge.
"It's a retention tool for us, but we won't move them," he said of his customers. "It's up to them."
T-Mobile, meanwhile, will report its results in early May.
Verizon shares fell nearly $1, or 1.9 percent, to $46.51.
Corrected at 10:52 a.m. PT: AT&T's upgrade program is Next, not Jump.