Verizon Dropping Contracts, Subsidies, and Family Plans

Both T-Mobile and AT&T have moved away from the original model of contracts and subsidies in favor of installment plans or simply selling devices at full price, and today Verizon announced that they will follow in their footsteps.

Verizon said that it will replace these contracts with four new data plans that don’t offer customers subsidies for their smartphones. The new Verizon plans come in four options – Small, Medium, Large, and X-Large – each of which offers unlimited talk and text as well as a set data allotment. The cost for a smartphone will be $20/mo, a tablet or Jetpack portable Wi-Fi hotspot will be $10, and a “connected device”, such as a smartwatch, will cost you a monthly $5. You then either buy your phone at full price or pay a monthly equipment installation plan fee. If they go over their data bucket for the month, they will have to pay a whopping $15 for each extra GB they consume.

The smallest option, with one gigabyte of data, is $30 per month. Rob Miller, vice president of pricing and promotion said that they will watch the new plans closely, and apply any changes in case of a huge market demand. Finally, X-Large stays true to its name by offering customers 12GB of shareable data for $80 a month.

Under pressure from trends in the industry, Verizon is simplifying its wireless plans for new customers. For instance, Apple iPhone 6 was available under contract for two years for $200.

Under the new system, Verizon will have no family plans or single-line options.

The plans will be entirely separate from the cost of a smartphone or other device, however, and have no minimum contract: users will be able to switch or cancel on a month to month basis, or indeed add or remove devices from the shared data bucket. T-Mobile ended the discount phone program two years back. Don’t get excited just yet, though, since there’s no guarantee that your revamped service charges will be any less than what they are now.

Once you’ve selected a plan, you’ll need to pony up a monthly access fee for each device on that plan.