Verizon Wireless Drops Single Payment Fee Proposal

(RTTNews) – Verizon Wireless Friday announced the withdrawal of a plan to charge a $2 fee for online or telephone single payments, just a day after coming up with it. The company said it made the decision in response to customer feedback about the plan. The “payment convenience fee” had been scheduled to come into effect on January 15.

The Federal Communications Commission had issued a statement earlier Friday expressing concern and that it is looking into the matter.

Verizon Wireless is a joint venture between Verizon Communications Inc. (VZ: News ) and British telecom giant Vodafone Plc (VOD: News ,VOD.L: News ).

On December 29, Verizon Wireless had announced the fee for customers who chose to make single bill payments in alternate payment channels such as online, mobile, and telephone. The fee was not contemplated for those who paid by electronic check or enrolled in AutoPay. Verizon had encouraged customers to use those or other payment options that incurred no fees. The company had explained the fee as designed to address costs to support payments in those channels.

In the statement retracting the move, Verizon said today that it made the decision in response to customer feedback about the plan.

Dan Mead, president and chief executive officer, said, ” At Verizon, we take great care to listen to our customers. Based on their input, we believe the best path forward is to encourage customers to take advantage of the best and most efficient options, eliminating the need to institute the fee at this time.”

At the end of the third quarter, Verizon Wireless had 107.7 million total connections, an increase of 6.5 percent year over year, consisting of 90.7 million retail customers and 17.0 million wholesale and other connections. Smartphones accounted for 39 percent of the Verizon Wireless retail postpaid customer phone base.

Operating income margin in the third quarter for Wireless was 29.0 percent. The segment posted strong results on increased smartphone penetration and increased retail postpaid ARPU or average monthly service revenue per user. Verizon Wireless added 1.3 million total connections in the quarter, including 882,000 retail postpaid customers, and 367,000 wholesale and other connections.

VZ closed Friday’s regular trade at $40.12, up $0.07 or 0.17%, on the NYSE. In the after-hours, the stock lost $0.12 or 0.30%. Over the past year, the stock traded in a range of $32.28 – $40.08.