Verizon eliminating smartphone subsidies for new customers beginning August 13

verizon logo

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.

The company revealed four new incoming plans with varying amounts of 4G LTE data, from the basic $30 per month plan with one gigabyte of shareable data to the $80 per month plan with twelve gigabytes of cellular data.

Come August 13, new customers will be able to buy a device on one of Verizon’s new plans by either purchasing it outright or by using the carrier’s device payment option to spread the hardware costs out over 24 months with interest-free financing, formerly known as Verizon Edge.

As of August 13, subsidized smartphone pricing on a two-year contract will no longer be available to new customers.

The new plans are as follows:

  • Small: $30/month for 1GB of shareable data
  • Medium: $45/month for 3GB of shareable data
  • Large: $60/month for 6GB of shareable data
  • X-Large: $80/month for 12GB of shareable data

The new plans go into effect next Thursday, August 13.

Additional data allowances will be available to Verizon’s data-hungry users.

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.

More Everything customers will be able to switch to the new plans as well.

Not that long ago, U.S. carriers sold high-end smartphones subsidized.

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.

T-Mobile and other carriers like AT&T and Sprint typically spread out the retail price of a smartphone with zero-interest monthly payments. This way, customers know precisely how much their smartphone costs independently of their wireless service charges.

Are these new non-subsidized plans a better deal or a rip-off?

Source: Verizon Wireless