Verizon Eliminates Contracts and Device Subsidies
by Brandon Chester on August 7, 2015 2:58 PM EST
North America has always had a fairly unique pricing structure for buying mobile devices. In many places, the concept of purchasing a device for a heavy subsidy and committing to stay with a given carrier for two or three years is unheard of, but in the United States and Canada it has always been the norm. However, that dynamic has been changing as it has become more difficult for operators to subsidize expensive smartphones for the wide market of consumers. Both T-Mobile and AT&T have moved away from the original model of contracts and subsidies in favor of installment plans or simply selling devices at full price, and today Verizon announced that they will follow in their footsteps.
With Verizon's new plans, there are no more contracts and no more device subsidies. Instead, consumers pay for their phones, pay for a bucket of data, and then pay a fee for each device that they add onto the account. The base monthly data fees are 1GB for $30, 3GB for $45, 6GB for $60, and 12GB for $80. On top of the data bucket fee, users will pay $20 to add a smartphone to the account, $10 for a tablet/data stick, and $5 for a smartwatch with cellular capabilities. Additional data over the limit will cost $15 per gigabyte,
As for existing consumers, Verizon will apparently offer avenues for them to get another subsidized device when they transition to these new plans, and they can also hold onto their older plans if they desire. Verizon customers interested in the new plans can switch over when they go live on August 13.
Source: Re/code
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ciparis - Saturday, August 8, 2015 - link
These types of plans are all you can get at T-Mobile, and they sell iPhones just fine. Turns out people don't mind seeing the monthly cost of the phone separate from the service. The final cost is similar anyway.Deelron - Saturday, August 8, 2015 - link
If people as a group were truly always looking to cut costs they wouldn't have bought flagships in the first place when they were a $200-$400 down payment compared to free.People leave other services because familiarity breeds contempt, it's always got to be better with *blank*, because my current *blank* sucks.
Impulses - Saturday, August 8, 2015 - link
People in general don't even switch carriers as much as some would like to believe anyway, there's a reason AT&T and VZW retain such a large user base... And it ain't because ALL those people need the superior coverage, it's sheer inertia and laziness.Impulses - Saturday, August 8, 2015 - link
True, but at least you have more options. If you choose to keep a phone longer than two years you can now save, or if you want to upgrade more often it's not as painful, or if you wanna go with a lower cost device you do end up saving money. Vast majority will keep buying an iPhone/SGS and paying it off in installments, so yeah...cyrand - Saturday, August 8, 2015 - link
Depends on your plan. For me this going to increase cost by quite a bit if I buy equivalent phone I own now. I currently getting 2GB of data from Verizon for $60 (the 60 all-inclusive data/text/device activation fee etc.).There no 2GB option on the new plans and 1GB not enough but 3 GB more then I need. Under 3GB my price goes up to $65(45 data + 20 activation fee). I currently have a note 4 which Verizon list as $300 subsidize or 700 full price). Assuming I keep a phone for 2 years 400/24 = 16.6. 5+16.6 is an extra $21.6 a month or $518 over 2 years compare to my current plan.
Am fine waiting 2 years between phone so for my situation I see nothing positive about the new plans.
dark4181 - Friday, August 7, 2015 - link
Okay, but how much for text/voice? Still a separate charge? Inclusive in the data bucket?Impulses - Saturday, August 8, 2015 - link
Voice has been inclusive and unlimited in the vast majority of US plans for years, they just don't care to nickel and dime for it anymore cause it's not worth their time.takeship - Friday, August 7, 2015 - link
I have a theory. This move isn't about exposing the cost of high priced phones, or offering clearer choices to subscribers. In the wake of stagefright, ect, this is about removing legal liability for hacks from Verizon. If my phone is licensed on a contract from Verizon, as is currently the situation with most of their customers, then there is at least a degree of legal obligation from Verizon to ensure that my device is not knowingly insecure. I know no one has ever yet tested this against the carriers in court, but it's probably a slam dunk should a trial lawyer look to make a name for him/herself doing it. If phones are offered on installment plans as part of a secondary contract however, then Verizon has the ability to tell future juries - hey look, we were just collecting a payment for this phone on behalf of Samsung/LG/Sony/HTC etc. It's not OUR phone, we're just the middleman. With something upwards of a billion affected devices out there at present, it's doesn't take a lot of convincing to the board that the future legal costs for delaying or withholding security updates from subscriber phones (who were then hacked and had various terrible, no good things happen to them & identities) will far outweigh the alternative.alaricljs - Friday, August 7, 2015 - link
Then YAY and stop forcing the phone manuf's to lock their bootloader. HTC phones - super easy to unlock/root unless it's a VZW phone. It's similar with others, the S4 was simple to unlock if you got in during the first half of the model year, 2nd half it got murky. S5 got harder and S6 might not happen at all.Morawka - Friday, August 7, 2015 - link
$15 per GB over is highway robbery. until more people complain to the FCC and FTC about these prices, then i guess it will stay the same.. 1GB cost them fractions of a cent, pretty much free.