Verizon Kills Off Service Contracts. What Does This Mean For You?

Megalith

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I think we can all thank T-Mobile for this shake up at Verizon. The largest network is doing away with contracts and offering four options inspired by their competitor's Simple Choice plans. But what does this mean for you? Well, this is Verizon we're talking about, so it's not all sunshine and rainbows.
 
To think, some people were in favor of T-Mobile merging with AT&T. But the only reason you're with Verizon is coverage. It's pretty reliable. But otherwise T-Mobile is the better deal and Wifi calling helps with limited coverage. Also CDMA means it's going to suck to find a working phone for Verizon. The ASUS ZenFone 2 will not work with Verizon.
 
I'm not sure what's talking about with Apple. We were letting customers buy their phone a year ago and we have the iPhone.

If you have to be on Verizon, then this is an OK deal, but if AT&T's network is good, then I"m not sure why you wouldn't go with Cricket. 35/month gets you 2.5GB and 45 gets you 5GB.

If you've got a family plan (or some trustworthy friends), you can drop the price to as little as 20/month and that's AFTER TAX!

In fairness, Cricket is throttled to something like 8Mbps, but for me, that falls well within good enough..hell it's better than Sprint (unless you're in a Spark area).
 
I'll have to find out how their Loyalty Plan is getting wedged into this. I pay $60 for unlimited talk/txt and 2GB data.
 
What the hell is a monthly access fee and why doesnt my carrier metro pcs have it? Sounds like a ceo golden parachute fund to me. On my metro pcs account I pay a flat $30 for the 1gb plan with all taxes and bs fees included, do the new verizon plans tack these on to the final bill in addition to the access fee?
 
what I hate about these things is that they advertise a plan at $50 a month with a small * that also adds a $20 a month fee for the phone. So that it's not $50 a month it's actually $70 a month. What I like about straight talk is that they charge $45 a month.... and that's it
 
What the hell is a monthly access fee and why doesnt my carrier metro pcs have it? Sounds like a ceo golden parachute fund to me. On my metro pcs account I pay a flat $30 for the 1gb plan with all taxes and bs fees included, do the new verizon plans tack these on to the final bill in addition to the access fee?

These are data buckets. You can share them with multiple devices. So if you buy the 12GB bucket and share it with 6 phones then your cost is $33.33/month each. That's a good deal if you use 12GB or less, but as I said above, with 5 devices, you can get 2.5GB/device/month for 20 bucks via Cricket.
It might be worth an extra $20/month for Verizon's network (though that's really $25 after tax), but I definitely don't see $65/month (plus taxes) vs $35/month (incl taxes).

These types of plans mostly benefit large multi-line accounts, IMO.
 
what I hate about these things is that they advertise a plan at $50 a month with a small * that also adds a $20 a month fee for the phone. So that it's not $50 a month it's actually $70 a month. What I like about straight talk is that they charge $45 a month.... and that's it

Eeyup right there with you
 
What the hell is a monthly access fee and why doesnt my carrier metro pcs have it? Sounds like a ceo golden parachute fund to me. On my metro pcs account I pay a flat $30 for the 1gb plan with all taxes and bs fees included, do the new verizon plans tack these on to the final bill in addition to the access fee?

Those additional $7-$12 in fees are just governtment taxes levied against them over the years being passed along to you. MNVO companies like Metropcs arent subjected to this since they arent the actual carrier, they are just leasing time from Verizon/ATT/Tmobile.
 
what I hate about these things is that they advertise a plan at $50 a month with a small * that also adds a $20 a month fee for the phone. So that it's not $50 a month it's actually $70 a month. What I like about straight talk is that they charge $45 a month.... and that's it

It bothers me that you dont know what the $20 surcharge is for. Your ignorance of this matter is exactly why Tmobile is able to get away with the "no contract" ploy, which is total hogwash. Guess what happens when you cancel your Tmobile "non-contract" after buying an iphone6 with them? You are charged the remaining balance of the iphone6, we'll say $500 for example. Guess what happens when you cancel your Verizon contract after buying an iphone6 wit them? You are charged an "early termination fee" which just so happens to be exactly the amount of the remaining balance.

Please think about this for a second, since it seems to be an area of great difficulty for most citizens to process. Verizon charges you an ETF, Tmobile charges you for the phone. What's the difference? You can bring your own phone to Verizon and deduct the $20 surcharge too.
 
What Does This Mean For You?

Nothing. I haven't had a contract phone for years and years. I'm interested in TCO. I'm willing to pay more for things up front to save substantially in the long run. If you say its too "expensive" to pay up front, then you can't afford it. Save more and come back later.
 
Why the hell is this in a video and not a real article? Videos are a useless way of disseminating this type of information, and I can't watch them all the time.

So, I haven't watched it, but I gather from the comments is that they are giving g a $20 per month discount if you bring your own phone?

Well then, $20 per month over two years is $480, if we don't count in time value of money and discounted cash flows and all that.

How did this $480 compare to the typical discount with 2 year plans?

What I am getting at is, is this a price increase or a price decrease' or roughly the same price with more flexibility?
 
It doesn't seem like this makes Verizon more competitive (price-wise).

E.g., when I bought my Galaxy S (yeah I know that was a long time ago) I paid $100 for the phone and got a plan that was $50 / mo.

It seems like under this new scheme the lowest plan I can get is $50 / mo, but then I have to drop $500 - $600 for a top-end phone. Not seeing how this is a better deal for consumers?

I think this is going to hurt the sales of high-end phones.
 
Zarathustra[H];1041782677 said:
Why the hell is this in a video and not a real article? Videos are a useless way of disseminating this type of information, and I can't watch them all the time.

So, I haven't watched it, but I gather from the comments is that they are giving g a $20 per month discount if you bring your own phone?

Well then, $20 per month over two years is $480, if we don't count in time value of money and discounted cash flows and all that.

How did this $480 compare to the typical discount with 2 year plans?

What I am getting at is, is this a price increase or a price decrease' or roughly the same price with more flexibility?

Alright, so having actually found an article to read rather than this video junk I can now make a real comment.

I currently pay Verizon ~$93.50 a month for a traditional 2 year plan with 3GB of data and one smartphone line.

In the new system this would cost me $20 for the line, and $45 for the 3GB of data. With fees and taxes, that means its $15 to $20 less than a traditional 2 year plan that includes a hardware discount.

That means $360-$480 towards a phone. This could really go either way compared to the old model.

I suspect it's a huge coat savings for Verizon though, once you figure in the time value of money.

They are getting rid of a large up front expense for every new costomer, which they previously had to pay and get back in a trickle over 2 years.

I don't know what type of internal discount rate they use, but I would be absolutely shocked if this isn't a large money saver for them, and if it saves them money, you know who it is that loses, right?

So I am all for this more independent model, but once you take out the hardware cost out of the equation, the service cost has to drop more. Much more.

Next I'd like to see complete independence in hardware. Verizon doesn't sell phones at all, and has no say in their development. All phones come with unlocked boot loaders, and there is no Verizon "validation" process.
 
I did the numbers for me and no contracts do not fit me. I would end up paying at least $300.00 more in a 2 year span, paying for a phone outright. The whole point of a subsidized phone is that you pay more per month for a lower up front cost. It makes no sense to me to pay full price for a phone and only have 5-10 dollar discount on my plan. Now if my monthly went down from ~65 to around 30, I could work with that.
 
I did the numbers for me and no contracts do not fit me. I would end up paying at least $300.00 more in a 2 year span, paying for a phone outright. The whole point of a subsidized phone is that you pay more per month for a lower up front cost. It makes no sense to me to pay full price for a phone and only have 5-10 dollar discount on my plan. Now if my monthly went down from ~65 to around 30, I could work with that.

Yeah, I'm with you.

This is more of a "figuring out a way to take more money from customers under the guise of doing what they want" thing.

Similar to the lame attempt at appearing as if they were doing "a la carte" programming with FiOS.

At the expiration of my current contract, I may have to go elsewhere. I e been with Verizon for the best network coverage, but the other have caught up a lot in the past few years...
 
These are data buckets. You can share them with multiple devices. So if you buy the 12GB bucket and share it with 6 phones then your cost is $33.33/month each. That's a good deal if you use 12GB or less, but as I said above, with 5 devices, you can get 2.5GB/device/month for 20 bucks via Cricket.
It might be worth an extra $20/month for Verizon's network (though that's really $25 after tax), but I definitely don't see $65/month (plus taxes) vs $35/month (incl taxes).

These types of plans mostly benefit large multi-line accounts, IMO.

I just don't like how you have to pay $20 per month for a line + whatever tier of data bucket you get. Doesn't seem like I'm moving off of my unlimited verizon data + 450 minutes + unlimited text for $82 a month anytime soon.
 
This no contract bullshit is actually more expensive than the contracts before, if you care about upgrading your phone at least every 2 years. It's much cheaper for those who keep the same phone for years on end, but wasn't the whole incentive that you can keep upgrading? Right now my line access is $15 per month for two of my phones and $40 for the other, Edge would actually be cheaper over a 2 year period if you get a new phone every 2 years. This new plan is $20 per month flat, which will make it more expensive when you add the financing cost.
 
Somebody tell the guy in the video to stop bouncing....

Videos are seriously the worst way to convey information on the internet.

Whenever there is a video article, or a video guide instead of a traditional written one, I just move on.
 
So when does this take effect? I know someone who is switching because they need the coverage.
 
On my metro pcs account I pay a flat $30 for the 1gb plan with all taxes and bs fees included...

$35/mo ($30+Sales tax) for 2GB on Boost. Anything after is throttled to 0.5Mbps for the rest of the month. The premium for Verizon's "coverage" isn't worth it to me considering I actually have better coverage in the city with Sprint.

These days budget phones are more than good enough. I do more with my current phone than I did with the flagship just because the battery lasts twice as long without a huge screen and power hungry SOC chewing up battery life.

Eventually carriers are just going to have to drop the bullshit of overage fees and just sell speed tiers. Nothing can be truly unlimited when you have a time limit (one month) but I'd happily sign up for something based on how high the throttle cap goes.

$5/mo for speeds up to 0.5Mbps
$7/mo for 1Mbps
$10/m for 2Mbps
$15/m for 5Mbps
$20/m for 12Mbps
etc.

No overages, no restrictions, all would include tethering. Just give me a flat rate so I don't have to worry about how I use my phone.
 
I'm not sure about the contract fees. I switched from Verizon 10 GBs to T-Mobile with unlimited data no contract.

I went from 180ish to 100ish. With WiFi calling Verizon's network is not worth 80 more a month. That's the price with a Verizon government discount and non discount for T-Mobile. I haven't setup the discount with T-Mobile so it might be closer to a 100 dollar difference.
 
Nothing. I haven't had a contract phone for years and years. I'm interested in TCO. I'm willing to pay more for things up front to save substantially in the long run. If you say its too "expensive" to pay up front, then you can't afford it. Save more and come back later.

Most people don't understand TCO, all they care about is how much it will cost me right now. I work with people who lease their cars because they think it's cheaper. They make less money than I do but drive more expensive cars. Of course these same people have expensive cell contacts with the latest iPhone, and are spending as much for a single line as I'm spending for a 3 line family plan with T-Mobile.

These same people are always complaining about how they can't afford anything, and the problems they are having now that they need to turn in their leased car and get a new one. Meanwhile I'll continue to drive my existing car for several more years, with no car payments.

All the phone contracts do is hide the cost of the phone. If these people had to pay up front, most would be buying cheaper phones. I'll keep using my S3 (now 3 years old) until it no longer works or something like the S5 gets a lot cheaper. Can't see needing anything better than the S5 for the next several years.
 
Those additional $7-$12 in fees are just governtment taxes levied against them over the years being passed along to you. MNVO companies like Metropcs arent subjected to this since they arent the actual carrier, they are just leasing time from Verizon/ATT/Tmobile.

No it's not. Unless these are prepaid subscriptions, use fees are added to the bill. That 20 bucks is your subscription fee for everything but data.
 
I did the numbers for me and no contracts do not fit me. I would end up paying at least $300.00 more in a 2 year span, paying for a phone outright. The whole point of a subsidized phone is that you pay more per month for a lower up front cost. It makes no sense to me to pay full price for a phone and only have 5-10 dollar discount on my plan. Now if my monthly went down from ~65 to around 30, I could work with that.

In this case, it's a shared data plan, so if you're not sharing the date with multiple subs, it's not worth it. That said, most of the companies doing this have crappy BYOD plans. IMO, over 24 months, you have to save at least 450 dollars, or it's a ripoff.

Perhaps Verizon will come out with more plans that aren't shared buckets...and maybe those will cost less
 
I just don't like how you have to pay $20 per month for a line + whatever tier of data bucket you get. Doesn't seem like I'm moving off of my unlimited verizon data + 450 minutes + unlimited text for $82 a month anytime soon.

It really depends how much data you use. Clearly if you're a heavy data user, it's probably worth sticking with your plan. I pay 50 a month for unlimited with sprint (55 with tax), but I constantly consider going prepaid. Keep waiting to see if sprint's network will improve, but

Wow...just ran a speedtest...things have definitely improved...http://www.speedtest.net/my-result/i/1334480961
I hope coverage on all the highways has improved. I hate it when my streaming audio dies on long trips.
 
Most people don't understand TCO, all they care about is how much it will cost me right now. I work with people who lease their cars because they think it's cheaper. They make less money than I do but drive more expensive cars. Of course these same people have expensive cell contacts with the latest iPhone, and are spending as much for a single line as I'm spending for a 3 line family plan with T-Mobile.

These same people are always complaining about how they can't afford anything, and the problems they are having now that they need to turn in their leased car and get a new one. Meanwhile I'll continue to drive my existing car for several more years, with no car payments.

All the phone contracts do is hide the cost of the phone. If these people had to pay up front, most would be buying cheaper phones. I'll keep using my S3 (now 3 years old) until it no longer works or something like the S5 gets a lot cheaper. Can't see needing anything better than the S5 for the next several years.

I tend to agree with you up to a point.

I would much rather pay for my phone in full, and have a cheaper service in the long term. This way I can freely decide when it is time to change hardware, and I am not locked in.

The problem here is that Verizon's new plans aren't cheap enough to compensate for the lack of upfront discount.

Essentially they are blowing rainbows up our asses with how great they are and doing the right thing, when in reality this is just a massive price increase that is going to screw over their users.

For the same phone and service, "New Plan + full cost of phone/24" is more expensive than "Old Plan including hardware discount".

If my total paid to Verizon (including all taxes and fees) were in the low $50 range, it would be worth it, but at the prices they have announced, it is not.

Verizon no longer dominates the coverage game like they once did. It's probably time to look around for a different carrier when my contract is up. (Got more than a year left though :( )
 
$35/mo ($30+Sales tax) for 2GB on Boost. Anything after is throttled to 0.5Mbps for the rest of the month. The premium for Verizon's "coverage" isn't worth it to me considering I actually have better coverage in the city with Sprint.

These days budget phones are more than good enough. I do more with my current phone than I did with the flagship just because the battery lasts twice as long without a huge screen and power hungry SOC chewing up battery life.

Eventually carriers are just going to have to drop the bullshit of overage fees and just sell speed tiers. Nothing can be truly unlimited when you have a time limit (one month) but I'd happily sign up for something based on how high the throttle cap goes.

$5/mo for speeds up to 0.5Mbps
$7/mo for 1Mbps
$10/m for 2Mbps
$15/m for 5Mbps
$20/m for 12Mbps
etc.

No overages, no restrictions, all would include tethering. Just give me a flat rate so I don't have to worry about how I use my phone.

There is no way they're going to give you that. As it is you're often not getting 2Mbps as LTE. If they gave people 12Mbps for 20 bucks, they'd probably end up tehtering their asses off and we'd end up with even more network congestion.
 
Zarathustra[H];1041782978 said:
I tend to agree with you up to a point.

I would much rather pay for my phone in full, and have a cheaper service in the long term. This way I can freely decide when it is time to change hardware, and I am not locked in.

Jesus fucking christ do you people really not know how cell phone contracts work still? For the first 2 years IT IS THE SAME DIFFERENCE. You can either pay $80/month with a subsidized phone, or $60/month if you bring your own. After the "contract" is up, your bill drops by $20 because you are no effectively on a "bring your own phone" plan. All the contract does is increase the statistical likelihood that a customer does not switch to a competitor. Incentives to keep you upgrading prematurely, and the occasional good deal like $0 down payment on a late model phone further serve this end.

The only reason VZW is dropping the "contracts" and locking you into a "final payment penalty" like TMO is because CLEARLY the American public is fickle beyond all hell and easily manipulated. If verizon just drops the word "contract" you all shit a brick and think you're getting some amazing deal.
 
There is no way they're going to give you that. As it is you're often not getting 2Mbps as LTE. If they gave people 12Mbps for 20 bucks, they'd probably end up tehtering their asses off and we'd end up with even more network congestion.

I dunno. I seem to be doing pretty good on Boost.

3qU7V2X.png


Middle of the day, no signal, prepaid... and still faster than my cable internet.
 
For the first 2 years IT IS THE SAME DIFFERENCE. You can either pay $80/month with a subsidized phone, or $60/month if you bring your own. After the "contract" is up, your bill drops by $20 because you are no effectively on a "bring your own phone" plan.

I've never had a monthly price drop. I'm paying the same now that I did in Dec. 2010 when I started my 2-year "contract". :confused:
 
Jesus fucking christ do you people really not know how cell phone contracts work still? For the first 2 years IT IS THE SAME DIFFERENCE. You can either pay $80/month with a subsidized phone, or $60/month if you bring your own. After the "contract" is up, your bill drops by $20 because you are no effectively on a "bring your own phone" plan. All the contract does is increase the statistical likelihood that a customer does not switch to a competitor. Incentives to keep you upgrading prematurely, and the occasional good deal like $0 down payment on a late model phone further serve this end.

The only reason VZW is dropping the "contracts" and locking you into a "final payment penalty" like TMO is because CLEARLY the American public is fickle beyond all hell and easily manipulated. If verizon just drops the word "contract" you all shit a brick and think you're getting some amazing deal.

No what they're saying is the price isn't dropping by 20 bucks. And it's not. This isn't a good deal for anyone that's not on a multi-line account. They may have other plans that are good deals, but this is not one.
 
I've never had a monthly price drop. I'm paying the same now that I did in Dec. 2010 when I started my 2-year "contract". :confused:

Ahh, I understand. You were referring to the new set of plans. Either way, it looks like it still ends up being more expensive.
 
I'm still with Verizon for the coverage and maintaining my unlimited data. I use 10+ gigs a month easy, so despite it costing me just shy of $120 a month for 700mins/unlimited text and data, it's been worth it. They keep trying to get me to switch, saying they can save me money, I always tell them to look at my data usage "oh, never mind" is what I always get.
 
I dunno. I seem to be doing pretty good on Boost.

3qU7V2X.png


Middle of the day, no signal, prepaid... and still faster than my cable internet.

Pretty sure Boost is just sprint. You're in a spark area. Spark, is not everywhere and it goes quickly. I can remember having rates like these in the parking lot of a grocery store...as soon as I walked inside, I dropped to 2-5mbps down.

I'm actually surprised I"m getting those rates inside. It's rare, IME. Now if we ever get real 4g throughput in the U.S., then maybe your 12Mbps will be reality, but we're a long way from that.
 
I've never had a monthly price drop. I'm paying the same now that I did in Dec. 2010 when I started my 2-year "contract". :confused:

You have to call and ask for the subsidy to be removed once the two year term is complete. Bought my mother a new phone in December and she didn't need to upgrade, so I had her call Verizon. Bill went down $25/mo.
 
Pretty sure Boost is just sprint. You're in a spark area. Spark, is not everywhere and it goes quickly. I can remember having rates like these in the parking lot of a grocery store...as soon as I walked inside, I dropped to 2-5mbps down.

I'm actually surprised I"m getting those rates inside. It's rare, IME. Now if we ever get real 4g throughput in the U.S., then maybe your 12Mbps will be reality, but we're a long way from that.

My rates are pretty constant, actually. I have a basement apartment and effectively zero bars when indoors and I still get that speed. The only time I see my phone switching to 3G is when I go through the tunnels on the L.

(And yeah, Boost is wholly owned by Sprint, it's Sprint service without roaming, essentially) I was on Virgin Mobile before I went on Verizon and immediately regretted it. Stuck it out for two years and went to Boost because they had the better deal of the two. Better coverage, generally. Had plenty of dead spots in Chicago when I was on Verizon.

I know this isn't the rule for everywhere, but generally speaking... it's not out of the question to expect that speed tiers will be what we're eventually paying for. Makes much more sense than "buckets", that's for sure. (Which is why Verizon would never do it.)
 
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