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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Morawka - Sunday, August 9, 2015 - link
AT&T still does subsidies.. they never stopped. The only thing that changed with AT&T is you cant get a subsidized phone through a 3rd party (apple store, Wal-Mart, Best Buy). to get a subsidized phone you have to go to the AT&T Store.cmdrdredd - Friday, August 7, 2015 - link
Not when it's as simple as a $25 addition to the bill. You don't have to walk into AT&T or T-Mobile and drop $850 for a top of the line device. You can get whatever you want with no money down if you qualify credit wise or you put a small down payment and pay per month for the device. Verizon will have to offer that or nobody is going to want to sign up.Impulses - Saturday, August 8, 2015 - link
This model ends up being just as bad as the straight subsidy model IMO, but it's entirely the clueless customer's problem... At least the few that bother doing any research and basic budgeting have a couple more options now, they're the few and not the many tho.cmdrdredd - Saturday, August 8, 2015 - link
It's actually better because you are buying the device outright with the payment plan. The subsidy actually costs you more, this doesn't.Impulses - Saturday, August 8, 2015 - link
You also bought phones outright with contract plans, it was yours to do with as you please after the contract... Old contract plans had a hidden subsidy, that's what I was alluding to and comparing, not those new fangled phone lease options... That is indeed the biggest rip off of them all.minijedimaster - Sunday, August 9, 2015 - link
Yeah, except when the contract ended on the old plan your bill never dropped. On these new plans where you are paying the phone off with monthly payments, those monthly payments go away when its paid off and your bill drops to the regular monthly price.Impulses - Monday, August 10, 2015 - link
I'm not arguing the old model was better, just that this isn't a massive improvement. It's definitely better for people that do their research, more options is always better, most people end up paying exactly the same darn thing over two years tho... And they'll likely keep upgrading about as often, if not because they want to because they have to (clumsiness, theft, etc).michael2k - Friday, August 7, 2015 - link
iPhone does okay in Europe:http://www.kantarworldpanel.com/global/News/Apple-...
I don't think Verizon, being about a third the US subscriber base, is going to rock the boat too much given that AT&T, Sprint, and TMo have offered subsidy free phones for a while now:
https://www.strategyanalytics.com/strategy-analyti...
Vatharian - Friday, August 7, 2015 - link
Wrong. In Europe we also have HEAVILY subsidized phones, and buying them at $1 is extremely common. Issue is, for $80 in EU we have basically unlimited data. I personally pay $37/mo for two activations, one 100GB with no overage (slowdown 2 mbps after), and second with 12 GB/mo, without overages too (slowdown to 128 kbps), and unlimited calling in EU. And that includes subsidized HTC M8. If someone offered me $80 for 12GB I would simply laugh at his face and gtfo.Impulses - Saturday, August 8, 2015 - link
That's just AT&T and Verizon's pricing. Sprint and Tmo both still offer unlimited data for similar prices and while their network coverage doesn't match the big two, they still cover half a continent which no carrier in the EU is doing.If a national US carrier told me I'd have to worry about roaming and long distance charges anywhere between NY and LA (or even Hawaii and Puerto Rico) I'd laugh at his face and gtfo.
Grass is always greener and all that... Outside of software bloat, I don't think US carriers are really faring any worse than most other locations anymore, their and their networks are certainly bigger than any other location's.