Verizon responds to T-Mobile with Device Payment Plan for smartphones, due April 21

By , Apr 13, 2013

Verizon Wireless store (interior 001)

Boy, did T-Mobile’s ‘Uncarrier’ initiative hit a nerve. As you know, the nation’s fourth-largest carrier landed the iPhone yesterday and just recently “canceled our membership in the out-of-touch wireless carrier club” by unleashing monthly installments separate of wireless service, reducing upfront cost of unsubsidized gear a great deal.

And just as T-Mobile yesterday announced “gangbusters” iPhone opening (even if that’s not really a number), Verizon swiftly responded by delaying phone upgrades from 20 to 24 months. The backlash ensued and Verizon quickly realized the change may not be “consistent with how the majority of customers purchase new phones today,” as it argued.

Therefore, the big red carrier followed up by announcing a one-year monthly installment plan for high-end smartphones costing over $349.99. It’s called Device Payment Plan and we have all the details right after the break…

In a nutshell, Verizon’s brand new option for customers spreads the full, unsubsidized smartphone price over the course of a year through monthly installments, per internal communication originally leaked yesterday by Droid-Life.

Verizon Device Payment Plan (Droid-life 001)

It’s basically an additional option for people who “want the latest cutting edge device or are just not satisfied with a working device,” according to the leaked document.

People who are cool with dividing the full cost of their device over twelve monthly installments will also need to pay a “finance charge” of $2 per month, amounting to $24 annually.

Unlike T-Mobile’s monthly installments introduced alongside a significantly cheaper Simple Choice Plan (here’s fine print), Verizon’s Device Payment Plan is an extension of their existing tablet financing program.

A company spokesperson confirmed to The Verge that only smartphones and tablets costing north of $349.99 are eligible for a Device Payment Plan.

Engadget points us to an updated version of Verizon’s upgraded eligibility terms from yesterday, now with an added paragraph stating that Device Payment Plan launches April 21.

Customers also have the option of purchasing a phone at full price at any point before their contract expires and beginning April 21, some devices will be available for purchase through the Verizon Wireless Device Payment Plan.

The new Device Payment Plan is separate of and has nothing to do with existing device subsidies, which continue to be accounted for in Verizon’s wireless service costs.

Earlier this month, Verizon CEO Lowell McAdam said he would “watch the consumer response that T-Mobile gets” from its decision to drop contracts and phone subsidies altogether.

The carrier did not talk specifics, but we’re inclined to think that paying full retail price upfront may still be a little more affordable versus opting for a Device Payment Plan, at least in the long run.

The new Device Payment Plan should help offset yesterday’s downgrade to the previous 20-month early upgrades, now extended to 24 months. This means that Verizon won’t count you eligible for a fully subsidized high-end device upgrade until you complete 24 months on your billing contract, which is a bummer.

No matter how you look at it, no one can touch T-Mobile’s ‘Uncarrier’ terms.

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  • LAGISSUEZ

    He’ll yeah T-mobile! Kick their $&@$ing asses!

  • http://twitter.com/Jackzzz99 Jack Wong

    Does Verizon know how bad(slow…) is their 4G LTE in NYC?

    • Matthew Agostino

      Must be a problem with your device, I work and live in NYC, have an iPhone 5 LTE and I did the swap upgrade loophole to keep my unlimited data plan. My LTE speeds are fast as hell. On average I get 25/20mbps

      • http://twitter.com/Jackzzz99 Jack Wong

        I am sorry, I am the IT support in the company, and I am not talking about just 1 device.

        Moreover, that is not a good reason to ask Apple swap the device lol…

  • Guest

    Nice (try) save Verizon, but I really don’t think its going to be much help. I do remember always reading Droid-Life back in the day though. ha

  • http://www.facebook.com/joe.jonsen Joe Jonsen

    lol BS customer will end up paying more…

  • http://twitter.com/hydrophonics J. Rockwell

    Both AT&T and Verizon have been screwing us proud iPhone owners from the jump, and it is obvious collusion between the two when both carriers are the exact outrageously high fees. GO T-MOBILE!!!

  • Matthew Perry

    Not only will a customer pay more ($48 finance charge + subsidized + installment) but they could just choose their own financing option such as a credit card and just take the interest on it per month, and still likely come out better off since you’d be able to easily calculate the total outright device cost + interest easily to know if it’s cheaper than Verizon’s total.

    This really only affects people that somehow have Verizon and can’t or don’t have a credit card (or some other financing option), don’t want to do the calculation of cost, or aren’t intelligent enough to realize “simple” isn’t necessarily the best option.

    I’m curious what it’ll look like, just an ex:

    Monthly payment plan + subsidized: $200 up front, $20 per month + $2 finance charge.

    Or I’ll put it on my credit card: Let’s say it’s $600 up front (might be a cheaper outright device cost which would make this all lower), and we’ll go with a 1.25% interest rate (15% APR on a credit card) = $7.5 ‘finance charge’ the first month and going down each month after with payment of minimum or would make more sense just to pay $50-100 off each month of a credit card and be done with it in 6mo to 1yr and have paid anywhere from $0-50 finance charge. Total = ~$650

    I know that’s not a guaranteed pricing for Verizon but if it was close to that, it’ll come out to around $720 or more over two years through Verizon.

    That’s ignoring any no interest for certain time period, or other benefits someone might have through their credit card.

    • http://www.facebook.com/douglasjonthurston Douglas Thurston

      very well done. thanks. :)

  • http://www.facebook.com/LethoeshatedadedicatedfatherGreen Keith Green

    They didn’t say anything about the $20 per month smartphone fee going away if u pay for ur device fully. I bout my 64gb ip5 at full price and I’m still paying that and I’m not happy. I will talk to them on the 21st. I’m deploying the 23rd so I might b switching carriers when I get back. Might get a GS4 too. But that’s a big maybe.

  • http://twitter.com/rydogg23 Ryan

    Tmobile would destroy everyone if they could just get that damn network up to speed. Do that, and its a wrap

    • http://www.facebook.com/douglasjonthurston Douglas Thurston

      i have a friend on t-mobile and when i sit beside them and use speedtest.net at the same time. their ridiculously slow.

  • James

    I dont see the advantage to T-Mobile’s Uncarrier plan. I just went to their web site and chose a family plan with two iPhone 5′s and unlimited data and it would end up costing me $210/month on average over 1 year. And $105/mo over 2 years, so obviously it is cheaper if you stay with them for two years, but then what’s the point of not being contracted in?

    • http://twitter.com/kev0224 Kevin Lam

      1) It’s cheaper
      2) there’s no contract.

      I fail to see how any of these are negatives.

      • http://www.facebook.com/jamestrenda James Edward Trenda

        Those are not negative things–if they’re true–but, as I previously stated, it’s only cheaper, by my calculations, if you stick it out for two years. Otherwise, it’s much more expensive, so what is the point of no contract if you have to fulfill the two years (or thereabouts) to get an overall cheaper monthly bill? If someone can show me how it is cheaper, then that would be helpful, but don’t just say it’s cheaper because I fail to see how it is.

      • http://www.facebook.com/jamestrenda James Edward Trenda

        And actually, I don’t know where I got $105/mo from. That should have been $185/mo which means that even after two years, it’s still more expensive or about the same.

    • Wes Attaway

      Wow, your numbers are way off. On T-Mobile, two iPhones with unlimited data are $140/mo, and if you’re doing the payment plan, it’s $180/mo for two years. After which, it automatically drops back down to $140/mo. On Verizon there is no unlimited plan, so lets say you choose the 10GB plan (of SHARED data, not even 10GB per phone), plus two iPhones, you pay $180/mo and after two years, you’ll continue to pay $180/mo. AT&T is the same cost, (but it gets you there slightly differently). (And with both AT&T and Verizon, you’re sharing your data, whereas with T-Mobile, you get unlimited PER device.)

      Additionally, the cost of the phone, whether you pay upfront or in installments is cheaper on T-Mobile. By about $70.

      If you want to upgrade sooner, you can trade in your current phone on T-Mobile at any point for a credit towards your new one, something you can’t do with Verizon or AT&T until 20-24 months.

      Additionally, you get WI-FI hotspot at no extra charge with T-Mobile, whereas its at least $10-20/month more with the others.

      • http://www.facebook.com/jamestrenda James Edward Trenda

        You made some valid points–namely, T-mobile’s trade-in policy, and hotspot sevice. However, I wouldnt say my numbers are way off, and neither of those two points of yours were on topic. I think we both made assumptions about one another. For me, it’s more expensive to switch to T-Mobile. I’m paying a little less than $180/mo for two 64gb iphone 5′s, 2000 shared minutes, and unlimited text and data (grandfathered and bought phones outright). Im also out of contract with Verizon. So during the first two years of T-mobile service, by both our calculations, its more expensive. As far as free hotspot goes, did you forget what community you were in? I already get free hotspot by being jailbroken. :) Plus Verzon has better nationwide LTE coverage.

  • http://www.facebook.com/Makavelli.1 Joseph A. Ahmad

    Forget you Verizon. You have no reason to change the upgrade cycle. And a $2 monthly finance charge? Really? Jerks.

  • 笑傲江湖1

    留爪

  • http://twitter.com/burlow burlow

    it’s always been 24 month contracts on paper.
    but even if you buy the handset outright with this payment plan, you’re still paying outrageous amounts for monthly service.

  • http://twitter.com/Jackzzz99 Jack Wong

    Again, please calm down, I am talking about a specific area, it doesn’t mean Verizon is SUCK overall.

    Please… let me make it more CLEAR, as long as the carrier work well in my home and office, that is the best carrier for me.

    I also have amazing speed in College Point, Flushing, 30/10, so what… I have FIOS at home.

    Anyway, I am not here to “argue” that Verizon suck, at&t is the best. I am just sharing my experience.

    I take 7 train and I also stream news video, my monthly bandwidth is ~5GB these days, back to 3G, I barely able to get 1GB monthly bandwidth because it is really really slow…