From Yankee Group Summit, Verizon Wireless CEO: Verizon Wireless to Pro-Rate Early Termination Fees; Will Add New Customer Loyalty Benefits
More Value for Customers is Key to Transforming Wireless
NEW YORK and BASKING RIDGE, N.J., June 28 / / -- In the closing keynote presentation today at The Yankee Group's 2006 North American Wireless Leadership Summit in New York, Denny Strigl, president and chief executive officer of Verizon Wireless, announced that Verizon Wireless will begin to pro-rate the early termination fee (ETF) for customers nationwide in the fall.
Verizon Wireless is the first major U.S. carrier to commit to a national policy to pro-rate the ETF. The company will include new terms in customer contracts that will progressively reduce the amount a customer has to pay if they terminate their contract with Verizon Wireless before their committed term expires. The pro-rate will apply to contracts signed or renewed after the policy takes effect, and the amount owed will vary depending on the time remaining in the contract.
Strigl said the change is being made to adapt policies to customers' needs. "We believe dissatisfaction with flat early termination fees is tarnishing the entire industry," he said. Verizon Wireless has the most loyal customer base, as well as the highest ratio of local number portability (LNP) port-ins. "We also know that the few customers who leave us often return. We will work even harder to continue to deliver the best network and the best service, so customers won't want to leave us in the first place. That's what competition is all about."
To that end, Strigl outlined benefits Verizon Wireless will add to its Worry Free Guarantee(R) for customers who pay their bills online via the company's Web site. The additional guarantees include:
o Customers will receive notices via e-mail if there is a price plan that better matches their usage needs.
o To enable customers to take advantage of new technology more quickly,any customer with $49.99 or higher price plan may upgrade their primary line handset after 12 months at the then current promotional price and conditions. The company will continue to offer free phone upgrades every two years as it does now for all customers.
o If a customer's phone fails after the manufacturer's warranty, the customer will not pay more than $50 for a replacement phone.
o If a customer chooses, Verizon Wireless will store their phone contact list on its network -- at no cost -- so contacts can easily be restored when a phone is lost or stolen, or when a customer purchases a new handset.
Commenting on the Summit's theme of "wireless disruption," Strigl discussed how the wireless industry has the ability to transform itself in the years ahead by continuing to add value for customers through technology and responsiveness.
Strigl noted transforming trends going forward will look different than past transformations; they will happen over shorter periods of time and have a more customized appeal. Also, there won't be any one single earth-shattering application that will transform value for everyone, so the industry needs a constant stream of applications and content. Finally, transformations in the wireless business have been and will continue to be all about the distribution of the applications and services -- the network.
"It's the network that brings applications to life," he said. "The network is the enabler and the differentiator."
In announcing the company's plans to pro-rate the ETF and expand the company's Worry Free Guarantee, Strigl noted Verizon Wireless has a track record of listening to its customers and making policy decisions based on customer needs. Verizon Wireless parted with the industry by refusing to participate in a wireless directory when customers said they didn't want one. The company also broke from other wireless companies to support local number portability because customers wanted the freedom to take their numbers with them if they switched service providers. Strigl said Verizon Wireless is taking similar action with early termination fees, as it is an issue that increasingly is irking customers industry-wide.
"Our ability to continue to transform the wireless business depends on what we do with the intelligence in our networks -- and the intelligence our customers are feeding to us -- to provide new compelling value for the customer," Strigl concluded.
The full transcript of Denny Strigl's speech is available online at http://news.vzw.com/investor/events/2006/event_2006-06-28.html.
About Verizon Wireless
Verizon Wireless owns and operates the nation's most reliable wireless network, serving 53 million voice and data customers. Headquartered in Basking Ridge, N.J., Verizon Wireless is a joint venture of Verizon Communications (NYSE:VZ) and Vodafone (NYSE and LSE: VOD). Find more information on the Web at www.verizonwireless.com/. To preview and request broadcast-quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at http://www.verizonwireless.com/multimedia.
Source: Verizon Wireless
CONTACT: Nancy Stark, +1-908-559-7520, wireless: +1-908-229-4499,
Nancy.Stark@verizonwireless.com, or Robin B. Nicol, +1-908-559-7515, wireless:
+1-908-227-4959, Robin.Nicol@verizonwireless.com, both of Verizon Wireless
Web site: http://www.verizonwireless.com/
