Verizon is killing two-year contract options as it refreshes its rate plans

In the market for a new iPhone on Verizon? If so, please be advised that the big red carrier is killing device subsidies beginning next Thursday, August 13, in favor of all-new month-to-month service plans.

While Verizon launched its “Edge” branding for monthly installment plans for smartphones and other devices, the Big Red wireless carrier has apparently decided all of that, along with its “More Everything” plans, were simply too complicated for their own good. As a result, the carrier is refreshing its plan lineup, and, at the same time, ditching two-year contracts.

Verizon made the announcement on August 7, via CNET, and has changed quite a bit. First and foremost, plans are now known as Small, Medium, Large, and X-Large. The Small option will offer 1GB of data (per month) for $30, the Medium will have 3GB of data for $45 per month, the Large with 6GB of data for $60 per month, and, finally, the X-Large offers 12GB of data for $80 per month. (If you go over your allotted data in a month, Verizon will charge you $15 per extra gigabyte.)

After the plan has been chosen, it’s time to move on to the monthly access fee per device. Verizon will charge $20 per smartphone, $10 per month for tablets and dongles, and $5 per month for wearable devices. The monthly payment for the device will be tacked onto all of that as well, which is different from model to model.

Data in each bucket can be shared with up to ten devices and every plan includes unlimited calling and texting. As mentioned before, the new plans don’t require contractual obligation, meaning you’ll be paying for your wireless service month-to-month and be permitted to change to a different plan anytime you want.

Monthly line-access charges on the new plans are as follows:
  • Every smartphone line is $20 per month.
  • Tablet and Jetpack lines are $10 per month.
  • Connected device lines for devices like smart watches are $5 per month, “all the time.”
“Current customers can keep their existing plan or move to the new plan, with some restrictions,” note the carrier without explaining what those restrictions might be.

Subsidies let you have a bran spanking new iPhone in exchange for a small upfront payment and your signature on the dotted line. Your carrier would then recoup the subsidy over the course of your service contract.

The problem is, you were still charged same wireless service rates after your device has long been fully paid off. And because carriers cunningly baked retail smartphone prices into their service plans, you were being charged unfair prices after you had paid off your handset.

The wireless industry was turned upside down when T-Mobile and its outspoken CEO John Legere killed smartphone subsidies and complicated service plans more than two years ago. If anything, T-Mobile has successfully educated the U.S. consumer that the cost of a smartphone should be decoupled from wireless service pricing.

So what do you think ?

[via CNET]

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