Thursday, March 03, 2011

Can Verizon Justify A $350 ETF on a $200 Subsidy?

Since 2010 Verizon has raised it's ETF from $200 to $350 for smartphones and devices.  That works in the murky world of cell-phone pricing, but can it last the tablet game?

For cell-phones, list prices are relatively irrelevant.  Most people buying $500+ cell phones are doing so on a 2 year contract, complete with "subsidy" of $350 or so.  Verizon can claim (kinda) that you're just paying them later what you should have paid them sooner.

Not so with tablets.  The subsidy in the tablet space is a fairly transparent $200 - so can they really justify a $350 ETF?  I think not.  Prepare yourself, Verizon, for some lawsuits as the first ETFs are charged to tablet customers.

Fine Print Shows  $350 ETF for a $200 subsidy

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