Verizon will launch brand new, simpler data plans and kill subsidies as expected from August 13. Today, the company introduced a set of plans which will require customers to pay for their smartphones in monthly installments, or buy them outright, instead of having the cost subsidized.
Similar to the Simple Choice plans launched by T-Mobile a couple of years back, the data plans come in four tiers: small, medium, large and extra large. Those plans will get you buckets with 1GB, 3GB, 6GB or 12GB of data for $30, $45, $60 or $80 respectively. Every plan will include unlimited calling and texting, but customers will have to pay a flat-rate access fee for each device on the plan. Smartphones cost $20 each while tablets and hotspots cost $10 and other, smaller devices like smartwatches will cost $5 each. (No more varying access fee depending on plan cost.)
Since there’s no subsidized phone, customers aren’t tied to a specific length contract for the data plan. Subscribers will be free to change to a different plan whenever they feel like it. That’s information definitely worth knowing if you want to avoid the hefty $15 per GB overage fee Verizon will charge you once you hit your allowance limit.
Customers on More Everything plans will be able to switch to the new plans once they’re available on the market. Those still in contract, however, will still have to pay their current access fee until that contract is up before they can switch to the lower $20 fee for their smartphones.
It’s a shift in mentality for Verizon, with no more focus on individual lines or family plans per se. You can have one of the plans and use the bucket for just one smartphone, or you can add multiple smartphones and devices. The only difference in cost will be the additional access fees charged per connected device. For those worried about not having enough data, Verizon will offer higher data allowances for its highest users, but won’t advertise them publicly.
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Looks like this may save me money. Currently 2 iPhones with 2 GB data, paying around $130 per month. Calculating here, 3 GB is $45 + $40 for the phones = $85 (+ endless taxes, fees, etc.). And all I will have to do in the future is pay straight up for new iPhones? And… in theory… can then upgrade whenever I like? I guess I am cautiously optimistic.
Wrong.
$85 a month plus the cost of a new device per line.
If you don’t buy the phone outright at around 700-800 bucks per device..
First, the value of the subsidy in your case, with two lines, which you get with your current plan is about 37.50 per month, assuming that you actually use it by getting a new phone every couple of years. So you need to figure that in.
Further, you cannot compare your current bill total (which includes the “endless” hidden fees) with their quotes for their new plans, which do not include the hidden fees.
Using rough math, DON’T BE OPTIMISTIC. It will in the worst case cost you a little bit MORE for the new plans. For less data. Boo. Not a win for anyone but Verizon.
Good points, everyone! I feel so naive for thinking this would save me money.
So what is Verizon thinking?
A) That they can charge people whatever they want and it won’t cost them?
B) That their profit margins on smartphone sales are too small to be worth anything?
C) That customers are completely loyal now, even without a contract?
D) That device makers should charge less for their phones?
A few more calculations:
Okay, so we figure that the cost of the phone was already built into the price of the contract, right? Even if Verizon didn’t come out and say it.
So the phones I have now cost me $600 up front. The remaining $900 of their retail cost was assumed by Verizon. (And of course, I don’t know how much the phones actually cost them. Less, but I bet not that much less.) If that $900 was spread over the course of my 24 month contract, then $37.50 of my monthly bill was for the phones. Take that out, and the bill should be $92.50.
That means that if there is more than $7.50 in taxes and fees in my bill, then this new plan will cost me more money.
Checking my bill now:
Monthly charges: $112.80
Verizon Charges and Credits: $4.25
Government Taxes and Fees: $9.47
Assuming those fees and “charges and credits” stay the same, my bill will be $85 + $13.72 = 98.72. That is a difference of 126.50 – 98.72 = 27.78. Or about $10 lower than it should be, if the costs of the phone were being passed on to me and now subtracted out. (37.50 – 27.78 = 9.72.)
So in exchange for being able to switch carriers whenever I want, upgrade my device whenever I want, and whatever other “freedom” I get, I get to pay Verizon $10 more per month. #FreedomIsntFree
Don’t forget you will have to pay off the full price of the phone if you want to move to another carrier! yay!
pretty good calculation, Michael. However, the taxes and fees would be slightly different. Your former monthly charges is higher than your new charges so your new taxes and fees would be less than before. There’s one more variable in the calculation: Most likely, you would be paying taxes on your new phones.
I was already considering leaving Verizon, this likely puts the nail in the coffin 12gb is no where near enough for the family and the cost is pretty prohibitive. I know Tmobile is not as good but we will have to live with it. We had Tmobile before and it wasn’t too bad.
Switched to Tmo from AT&T last year, pay half as much, and haven’t had any issues thus far. Coverage outside of cities leaves a lot to be desired and Tmo’s high-band LTE is rather obvious indoors, but otherwise I didn’t notice a huge difference. Also, free personal hotspot was a nice bonus.
Wonder a few things. (1) can I keep my$80 10 gb plan with $15/line fee if I buy a phone on the payment option and (2) I have two lines still covered by the recently killed Edge up plan, can I still take advantage?
Hoping I am not forced into paying $20 more a month for what I get now.
The way to go is to own your device outright, make sure its compatible with most networks (which most are CDMA/GSM these days), then just pop in the SIM card from the company that gives you the best deal for your money. If something changes, you move to a bad reception area, etc… then just switch to another carrier and your phone will still work.
Given the fact that you are still paying for the phone with monthly installments, the savings here is pretty much non-existent. This is just another way for Verizon to make it incredibly confusing to get a cell phone.
FWIW, I’m paying $93/month (including fees and taxes) for a 128GB iPhone 6 Plus that cost me no money out-of-pocket.
How much data?
Unlimited everything.
which network/plan?
American plans are so damn expensive!! In the UK I pay 13£ and I have unlimited 4G data…
But this is America, where telecommunication laws are purposefully manipulated by congress to screw consumers.
We get a disfunctional government and a royal screwing by companies that don’t need to compete to make billions.
Soon the government will be shut down again to further screw Americans, all in hopes of members of congress to build political points.
We win.
” which will require customers to pay for their smartphones in monthly installments, or buy them outright, instead of having the cost subsidized.”
I’m confused by this statement. When were you not paying monthly for you phone? To me subsidy means I’m getting something without having to pay it back. That’s not the case here. I know my monthly bill included paying off the phone. Only difference now is it’s clearly itemized on my bill and I’m not tied to 2 years, I can upgrade every year if I want.
So if I buy the phone outright at $700-800, is it still locked to Verizon’s network? If not, what good is an unlocked Verizon CDMA phone compared to an unlocked GSM phone by other carriers.
I would think the GSM would be preferable.
If you pay the full price of the phone then the carrier has to unlock it if it is not already unlocked. That is the law.
Moreover, you can buy phones these days that are both CDMA/GSM compatible. For instance, buy a Verizon (CDMA) iPhone, and leave to ATT(GSM), it will still work.
Also, all Verizon iPhones come unlocked already, they have to be because of a spectrum deal with the FCC a few years ago.
FWIW, I bought a Verizon iPhone 5S under contract, and took it to T-Mobile (GSM) to get out of the contract. The phone worked completely fine on T-Mobiles network. I did not have to get it unlocked or anything….. This was after calling Verizon Customer Service and having them tell me that if I left my phone would not work. Apparently, Verizon is either misinformed or purposely lying to its customers…either way, i don’t want to do business with someone like that.
Hope this helps.
With a subsidy you could always sell your old iPhone for $200-400 and recoup the susbsidized price. I went from, a 3GS,4,5, to 6 plus and only had to pay an extra $99 for the plus after trading in or selling the other models.
I do have the Next plan for my IPad Air 2. It has a different upgrade cycle and different trade in value. Plus it only has a $10 data fee.
I assume that Verizon is making this change so that they can make a lot more money. I also assume that Verizon wants to spin this as a benefit to its customers.
A small subset of customers will see their prices go down: such as those that are in the country temporarily, or those that are often happy with very old smartphone technology and can go for 4 or 5 years with a device without loss, breakage, or obsolescence.
But for the vast majority, this is a huge loser
Under my current plan, I’m for an upgrade, and haven’t gotten the iphone 6 yet – would love some advice… should I got ahead and get the $199 upgrade under my existing plan, or switch to the plan and do the $27.08 monthly charge — is there really any difference except in paying more upfront?