13 Reasons Why Verizon is So Expensive in 2024
Verizon has held the title for having America‘s most reliable network for 15 years straight – but this superior coverage, speed, and quality comes at a cost.
A recent study found Verizon‘s average monthly bill per user is $20-30 higher than budget carriers like Mint Mobile and Visible. Why such a large price gap? Here‘s an in-depth look at the main factors:
1. Building State-of-the-Art 5G Networks
As the largest 5G rollout in the country so far, Verizon has invested over $45 billion in spectrum acquisitions and network upgrades focused specifically on enhancing their 5G coverage.
In fact, Verizon now has 5G available to 200 million people across nearly 1800 cities – providing super fast speeds by using high frequency mmWave spectrum.
- This requires denser infrastructure involving large numbers of small cells.
- These state-of-the-art 5G networks mean higher operating and maintenance costs.
- 5G smartphone users also consume much more data – further raising capacity requirements.
The Bottom Line: Verizon passes these increased infrastructure expenses to customers through premium 5G pricing plans.
2. Exceptional Network Coverage Area
While budget carriers operate mostly in urban areas to minimize costs, Verizon touts covering over 2.6 million square miles nationwide – from busy cities to rural communities.
This extensive coverage is extremely appealing for customers who value connectivity across locations. However, supporting reliable service across huge distances again passes on greater operating expenses to consumers.
3. Emphasis on Speeds and Performance
In third party testing for overall speeds and reliability, Verizon outranks every budget carrier often by over 25% faster downloads and greater data throughput.
By keeping capacity ahead of demand and minimizing network congestion, Verizon ensures consistently smoother streaming, gaming, downloads, and browsing – even during peak usage.
But fielding America‘s fastest most reliable network requires major performance monitoring investments and network optimization efforts.
4. Top-Rated Customer Service
Verizon continues leading in customer service over other low-cost carriers – solving issues quicker and with better trained technical reps.
Fielding over 120 million calls yearly requires running large US-based call centers alongside other support channels which greatly exceeds budget carrier operations.
5. Phone Subsidies and Financing
Rather than BYOD options, Verizon offers hefty device subsidies letting customers purchase iPhone 14‘s for just $99 with trade-ins and signup promos.
They also offer flexible low-APR financing for spreading full-priced device payments over 36 months – a facility rarely matched by discount carriers.
6. Bundling Home and Mobile Services
Almost 30 million households nationwide now subscribe to Verizon‘s Fios home internet service. Verizon also maintains bundling partnerships with large cable TV providers.
By packaging wireless, home internet, cable TV, and home phone services – Verizon caters convenience while also capturing more revenue per user.
This allows amortizing expenses over a wider range of service offerings – again enabling premium wireless pricing.
7. Corporate and Government Accounts
Nearly 9 in 10 Fortune 500 firms choose Verizon for company-wide wireless plans to equip their workforce.
Verizon also provides connectivity to over 400 state and federal public agencies – including dedicated networks for emergency first responders.
Catering enterprise-grade solutions and priority 24×7 business support is more complex and cost intensive – requiring pricier corporate plans.
8. International Roaming in 210 Countries
Unlike most budget carriers, Verizon provides seamless wireless connectivity spanning 210 countries outside the US.
But enabling 2G/3G/4G LTE roaming worldwide requires major partnerships and infrastructure – with costs passed onto consumers.
9. Ongoing Spectrum Investments
Beyond infrastructure, Verizon acquires wireless spectrum licenses through billions in ongoing FCC spectrum auctions to enhance coverage.
In 2022 alone, Verizon committed over $45 billion to acquire new mid-band flexibility and capacity for future network advancements.
These huge spectrum investments aiming to improve America‘s #1 network further drive up operating costs.
10. Network Capacity Expansions
Verizon‘s actual cell site count now exceeds 71,000 active towers and small cells, alongside nearly 125,000 network route miles of fiber optic connections.
Constant infrastructure expansions are crucial for Verizon to maintain America‘s top performing mobile network as demand surges.
But such continual investments in capacity and upgrades contribute significantly to carriers‘ expenses long-term.
11. Innovation in New Services and Apps
Aimed at consumers and businesses, Verizon develops specialized services like:
- Verizon Cloud: enterprise computing solutions
- BlueJeans: video conferencing software
- VTS: fleet tracking and management platforms
Pursuing these value-added software offerings requires huge upfront R&D investments – while also diversifying Verizon‘s portfolio beyond just wireless services.
12. Marketing Costs
As one of the most visible brands in America, Verizon invests heavily in advertising and marketing – reportedly spending over $2.5 billion per year.
From celebrity ads to SuperBowl commercials and title sponsorships, these branding expenses aim to attract new subscribers – but also add overhead costs.
13. Healthy Profit Margins
Ultimately, Verizon is a public company accountable to shareholders. So while customer satisfaction is a priority, healthy profit margins are also mandatory.
For reference, Verizon‘s wireless profit margin hovers between 25-28% – significantly above discount carriers and allowing premium pricing models.
If you prioritize network quality over bargain prices, hopefully the above gives some context around why Verizon commands consistently higher monthly rates. However, here are some ways to control costs:
- Opt for shared family plans over unlimited data for individuals
- Use auto-pay and paperless billing discounts
- Buy outright to avoid equipment installment fees
- Limit additional device protection plans
- Leverage employer discounts if available
- Review usage periodically to modify data caps
At the end of the day, Verizon competes on exceptional coverage and speeds – so customers ultimately pay a premium for that luxury. But the above tips can help minimize the pricing gap versus ultra-cheap carriers.
