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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Mondozai - Saturday, August 8, 2015 - link
Imp, most people dont need roaming except on vacation and its far less than it used to be, eliminated in 18 months, also.Sorry but US carriers are atrocious. I can get 100 GB data plans for 50 dollars, unlimited calls etc as well(Sweden). 80 dollars for 12 GB is utterly pathetic and a ripoff.
Impulses - Saturday, August 8, 2015 - link
I don't know, I travel to the USA couple times a year and that's flying out from the Caribbean. I imagine people within the continental US simply drive across state lines pretty often in certain areas...If US carriers were segmented by region like Euro ones you'd have to deal with roaming across every couple states, which would be particularly disastrous in the east coast. My sister takes the train out of Washington DC to Boston/NY/etc like every other weekend for one...
Discounting network coverage across half a continent (and additional territories) as a minor convenience seems a little oblivious to me.
Impulses - Saturday, August 8, 2015 - link
I'm not denying that $80 for 12GB is over priced btw, but like I said in the post you replied to, that's just two of the four major carriers. I pay $64 on Sprint for unlimited data/talk and I can still travel within my region far farther than... ;)Shoot, that's an old contract plan to boot (tho I'm outside contract and using a N5 bought from Google) so every couple years I can pay $0-200 for a $600+ phone. There's slightly cheaper contract-less plans too.
name99 - Friday, August 7, 2015 - link
You are utterly deluded. I say this based on the success of Apple in markets where phones are not paid for through a long-term contract. (I don't use the term subsidized because this "subsidy" hae not been present for a while now. It doesn't exist on some carriers and on ATT --- my carrier, so I know the details --- it doesn't exist for the Next plans, and is only worth about $60 for the non-Next plans. What you call "subsidy" is basically just the telco handling the details of a hire purchase agreement.If you think the sticker price of an iPhone is a deal breaker (personally I think you are wrong), then Apple will obviously create their own version of a "contract" based on you paying the phone off to them directly, over 24 months, charged either to your Visa card or your phone bill, whichever you prefer.
Impulses - Saturday, August 8, 2015 - link
Joe six pack will just pay his $20-30 a month for whatever phone he wants, people are so incapable of basic math and budgeting that they'll often even pay more for a phone in terms... They might go longer between upgrades, maybe, but that was happening anyway.Thrilled to be the Ex - Sunday, August 9, 2015 - link
My math challenge ex-wife marched in the day the iPhone 6s was available, and although both her and my two kid's iPhone 5s were in good shape, she signed up for a $250 a month phone plan - knowing full well that her overly generous child support was going to run out in less than a year!Now she's bawling to me that I need to pay the $57 per kid because they had to buy the newest and greatest because all their friends had it. This is a SCHOOL TEACHER, who ought to be able to do basic math. Plus she signed my youngest up for Verizon's "insurance" at $11 a month plus a $120 copay for repairs/replacements instead of Apple Care+, which costs $99 up front, but averages out to about $4 a month and they'll fix or replace your phone FOUR times during the 2 year contract. My kid broke her screen and it turned out to be cheaper to pay for it entirely herself! (Needless to say, Verizon's "insurance" is now history.) She paid $110 in premiums for NO benefits!
That's a pretty sad comment on who is teaching our children these days, but she's always outspent drunken sailors, which is a major reason she's my Ex. She somehow talked Verizon into dropping her bill to $150 a month, but I think it's time that both of my college kids learn that phones aren't free, or a right, or that dad will pick up the bill for their mother's stupidity. One thing's for sure, they'll be switching to a tracfone of some sort when their contract runs out, and I don't particularly feel like paying $1600 to bail them out.
vortmax2 - Monday, August 10, 2015 - link
Not trying to be a jerk, and I certainly don't know the full context of your divorce....with that said in response to the following:"but I think it's time that both of my college kids learn that phones aren't free, or a right, or that dad will pick up the bill for their mother's stupidity."
If you had any influence in your kids' lives up to this point, you should bear some of the responsibility for your kids' irresponsibility in the phone/money arena. Just sayin'.
TheGeneral44 - Saturday, August 8, 2015 - link
In the UK, at least, we actually do get subsidised phones but it's a bit different: You choose a monthly plan (2 year contract) with a combination of minutes/texts (usually unlimited nowadays) and data. You can then choose between paying more upfront and having a cheaper contract or paying a higher monthly rate but very little upfront. So if you look here (https://www.o2.co.uk/shop/tariff/apple/iphone-6/?p... you can see that I could get a 64GB iPhone 6 with 5GB data for £9.99 upfront and then £54.00/month. I could also choose the same deal but pay £729.99 upfront and then only have a monthly bill of £24.On the other end of the scale, I could get something like a HTC Desire 510 with 3GB data and pay nothing upfront with a monthly bill of £26.00 (https://www.o2.co.uk/shop/tariff/htc/desire-510/?p...
We also don't have punitive overage charges - if you go over your data limit then your data is either stopped or throttled (depending on the operator) and you can choose to pay more to get it back or just wait till next month.
You can also buy the phone on "pay & go"/"pay-as-you-go", where you get the phone at a slight discount without a contract but it's locked to the mobile operator that sold it to you.
Over here we never did the whole "Pay $199.99 upfront, $45 activation fee, sign a service plan for $100/month and then pay $40/month to add the phone to the plan" thing because it just seems like a major league rip-off. We also don't really do mail-in rebates and the like because it again feels like we're being ripped off.
Everyone here recognises that we're paying for the cost of the phone in the plan (and the mobile operators don't pretend otherwise) but we're happy with that because it means we don't have to lay down £500 upfront for the phone. To us, it just seems like N. American carriers charge too much for their phones!
rtho782 - Sunday, August 9, 2015 - link
In the UK, ours is a subsidised model. Buy a phone for nothing upfront, pay £40 a month for 4gb or so and unlimited mins and texts for 2 years. There are sim only deals for people that already have the phones and some mvnos that focus on this (giffgaff for example) but the big 4 operators all do most of their business with subsidies.RussianSensation - Sunday, August 9, 2015 - link
That would be a good development if it actually happened so phone prices could come down to earth. The iPod costs $199 but the iPhone 6 is $650? A full blown 13.3" laptop with USB 3.0, 256GB SSD, W10, HDMI, dual-band 802.11 AC, 8GB of RAM, trackpad, made entirely of aluminum costs $850 but the iPhone 6 Plus is $750 and surely Note 5 will be $700+? What a joke.http://www.amazon.com/dp/B00X4099OG/ref=wl_it_dp_o...