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Mobile services provider Verizon will eliminate its contract/smartphone subsidies system which allow some customers to receive free or severely discounted smartphones and replace it with data plans
Come August 13, Verizon is going to discontinue its contract-basedmobile data plans which offers its customers subsidies for new smartphones and replace them with a model which lets them either pay monthly rates for them or just buy them as normally, while beneficiating of a lower service fee. Prices will reportedly drop by an average of $20 per month to reflect this change.
Users until now had substantial subsidies and price cuts for even the most expensive smartphones on the market. The iPhone 6 for example would have gone from its retail $649 price to just $200 if the customer opted for a specific two-year contract (available only for new customers though). This move makes Verizon the second mobile carrier in the U.S. to end smartphone subsidies after T-Mobile.
The new Verizon data plans are four in number and don’t include family plans or the possibility of taking a single line. All of them have unlimited voice and text messages and vary mostly in the amount of internet data included, separated into so-called “buckets”; the smallest plan/bucket will offer customer 1 gig of data at the monthly price of $30, and they go up all the way to the “x-large” bucket which gets 12 gigs for $80.
The new system will not be contract-based, so users will be able to freely switch between these plans on a monthly basis. However, Verizon will still charge money for connecting devices to the data plan to different devices as follows: $20 monthly will be the cost for smartphones, $10 for tablets and $5 for smartwatches.
The result is a bit complicated, as some plans will be effectively paying more than before, while others will be discounted. For example, the 1 gigabyte data option used to go for $60 a month with the iPhone 6 included (with the smartphone connection cost included). Without it, they would have paid $45; but if we detract the $19 worth of iPhone 6 subsidies, the actual cost of the plan would have been $41. Under the new plans, 1 GB of data will cost $50 and offer no smartphone in the price.
On the other hand, the 3 gigabyte plan was worth $90 with iPhone 6 subsidies and $75 without, but under the new plan will be just $65. So Verizon are seemingly raising prices on their entry-level while cutting them on better tier plans.
Image Source: Yahoo
