In a surprise announcement from Verizon, the mobile phone carrier giant joins T-Mobile in its elimination of service contracts, so if you wanted the newest iPhone for $200 with a new two-year contract, you’ll now have to pay the full retail price of $649.99. This means goodbye to the free phone, discounted upgrades, and the early termination fee, but it also makes way to a more straight forward pricing system, showing what you’re paying, or overpaying for that matter, for your mobile service.
Verizon has never been known to have the most affordable service in the industry, but in paying for great coverage and reliability, you’re also paying for your phone discount charges built into its monthly mobile plan (you didn’t think Verizon was taking the hit for your free phone did you?). Now without those hidden fees it will drive down monthly service payments to see actual costs you are paying for, which is good for the United States that has typically had the highest costs in the world.
Ultimately we will be paying less for our plans and more for our devices, so how are you going to afford that $700 phone? Sure, the sticker shock is scary, but customers now have the option of paying for the full retail price up front, spreading out the cost over 24 interest-free installments, or even adding a down payment and spreading the remaining balance out over the next two years (yes, know what you’re thinking, it’s essentially a two-year contract).
There will be four shareable data plans you can choose from: small ($30/month for 1 GB), medium ($45/month for 3 GB), large ($60/month for 6GB) and extra-large ($80 for 12 GB). Users also pay $20/month per smartphone line, $10/month for tablets/hotspots, and $5/month for connected devices such as smartwatches. Individuals can select between data plans of 1GB for $45 3GB for $60.
T-Mobile removed their contracts almost two years ago, and now with Verizon, it now may be the industry trend going forward as AT&T seems to be going in that direction as well (Sprint currently offers leasing programs for a lower monthly payments but you cannot keep the phone and sell after). “We’re simplifying the experience of choosing a wireless plan by focusing on what customers say matters most to them,” says Verizon spokesman Chuck Hamby. “We’re also simplifying the math. These new options provide simple and clear billing, helping make accounts easy to manage and personalize.”