Verizon Eliminates Two-Year Contracts for Smartphone Upgrades

[MacRumors]

Starting today, Verizon will no longer be allowing customers who are upgrading their smartphones to purchase a two-year contract, effectively eliminating two-year contracts for all new and existing users.

While Verizon did away with two-year contracts for new customers back in August of 2015, existing customers were able to re-purchase two-year contracts when upgrading their smartphones. That option is no longer available, and customers will be transitioned to device payment plans as their contracts expire.

Two-year contract upgrade options are no longer available at Verizon stores and have been eliminated at partner stores, including Apple retail stores.

Customers who are currently on a two-year contract will need to purchase a phone outright or choose a device payment plan when their contracts expire and they need to upgrade their phones. A device upgrade fee will be required as well.

Verizon device payment plans for the iPhone 7 start at $27.08 per month, while plans for the iPhone 7 Plus start at $32.08 per month. Verizon offers a range of data plans, from 2GB for $35 per month to 24GB for $110 per month, with a $20 access fee for smartphones.

Verizon's move to fully eliminate two-year contracts comes on the heels of T-Mobile's "Un-carrier Next" announcement, which will see T-Mobile offering a single $70 per month unlimited plan with no additional fees.

Article Link: Verizon Eliminates Two-Year Contracts for Smartphone Upgrades

 

[AppleFan91]

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

 

[Cameroncafe10a]

"$24GB for $110 per month" ... Like that makes sense

 

[44267547]

Verizon was slowly leaning this way for while. The Annual upgrade program is a nice benefit if you upgrade annually and want the latest device.

 

[albinousrex]

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

 

[critter13]

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

this is for existing customers. sprint still lets existing customers keep old plans with contracts

 

[samcraig]

Whether it's VZ or anyone else - I find it a bad business practice to charge people an upgrade charge. That's a nickel and diming practice that needs to end. I've usually been able to negotiate it out by nicely asking.

 

[nfl46]

It's about time! They should have been got rid of them. Now, they need to get rid of all that company branding they put on their smartphones. I am surprised Samsung hasn't put their foot down and told them no you can't put it on our devices.

 

[Judas1]

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

It's only a greedy move by Verizon because they never uncoupled the data plan price which includes the cost of subsidies phones, but now wants you to pay for your phone also. No more contracts, might as well jump ship.

 

[oneMadRssn]

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

You may be on an older plan, and in many of those situations keeping the contract plan made sense. However, on their recent plans, the line access fee was much higher for two year plans than for payment plans or fully-paid phones. Also, with payment plans, the payments stop when you have fully repaid the phone whereas the higher line access fees of the contract plans persisted in perpetuity until you switched to a payment plan.

Two year contract:
$200 for device = $200 (charged once)
$40/mo line access fee = $480 annual
plus whatever data bucket you get
Total after two years: $1160 (plus whatever data bucket you get)
Total after three years: $1640 (plus whatever data bucket you get)

Payment plan:
Device is $0 down
$27.08/mo device payment = $325 annual (this fee ends after $650 is paid)
$20/mo line access fee = $240 annual
plus whatever data bucket you get
Total after two years: $1130 (plus whatever data bucket you get)
Total after three years: $1370 (plus whatever data bucket you get)

The longer you wait between upgrades, the better of a deal the payment plan is.

 

[Joshwa1]

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

The service plans are cheaper now that they aren't subsidizing the phones.

 

[Judas1]

You may be on an older plan, and in many of those situations keeping the contract plan made sense. However, on their recent plans, the line access fee was much higher for two year plans than for payment plans or fully-paid phones. Also, with payment plans, the payments stop when you have fully repaid the phone whereas the higher line access fees of the contract plans persisted in perpetuity until you switched to a payment plan.

Two year contract:
$200 for device = $200 (charged once)
$40/mo line access fee = $480 annual
plus whatever data bucket you get
Total after two years: $1160 (plus whatever data bucket you get)
Total after three years: $1640 (plus whatever data bucket you get)

Payment plan:
Device is $0 down
$27.08/mo device payment = $325 annual (this fee ends after $650 is paid)
$20/mo line access fee = $240 annual
plus whatever data bucket you get
Total after two years: $1130 (plus whatever data bucket you get)
Total after three years: $1370 (plus whatever data bucket you get)

The longer you wait between upgrades, the better of a deal the payment plan is.

It's hard enough to wait 2 years to upgrade, let alone 3 years. Hardly anybody will benefit jumping from an older plan to the new plans. With that said, after no more subsidies, it'll be crazy to stay with the old plan.

 

[MplsP]

I switched to T-mobile several years ago precisely for this reason. They were among the first to decouple the device from the service so you only paid for what you got.

Of course when AT&T followed suit a few years later they changed the calling & data plan structure to guarantee that the majority of people paid more when they switched off their old contract plan. $5 says Verizon does the same.

 

[B4U]

And yet, your calling and data plan prices remains just as high as when they subsidized the phones.

 

[adamjackson]

Kind of funny. My GF's iPhone 6 Contract expired today. She was going to go and grab an iPhone 7 and renew. I talked to her for an hour about how the 2 year 'loan' with upgrades every 12 months was a superior option but she was set on renewing a contract.

She was going to go tomorrow to renew.

LOL.
[doublepost=1483659071][/doublepost]

Now, they need to get rid of all that company branding they put on their smartphones.

This is MACRumors. No one here is going to share your passion. Our phones and computers don't have any stickers "EneryStar" "Intel Inside" "powered by NIVIDA" "Verizon wireless" "Powered by Qualcomm"

LOL. I've never had any branding on my device except a big-ass apple logo.

 

[oneMadRssn]

It's hard enough to wait 2 years to upgrade, let alone 3 years. Hardly anybody will benefit jumping from an older plan to the new plans. With that said, after no more subsidies, it'll be crazy to stay with the old plan.

I have no issue waiting 3 years

... that's a lie. But I do usually buy someone else's 1-year-old iPhone with AppleCare+ at a significant discount. It's like buying an off-lease car, some other sucker takes the financial depreciation hit for having the newest thing, and I still have something nice which is newish and new to me.

 

[Trik]

This doesn't seem to apply to business customers, I manage our Verizon business account and as of right now I can still purchase phones with the 2 year upgrade pricing. Thankfully...

 

[inplainview]

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

Most of Europe has been this way for years and years. And not locking. This is nothing new.

 

[albinousrex]

You may be on an older plan, and in many of those situations keeping the contract plan made sense. However, on their recent plans, the line access fee was much higher for two year plans than for payment plans or fully-paid phones. Also, with payment plans, the payments stop when you have fully repaid the phone whereas the higher line access fees of the contract plans persisted in perpetuity until you switched to a payment plan.

Two year contract:
$200 for device = $200 (charged once)
$40/mo line access fee = $480 annual
plus whatever data bucket you get
Total after two years: $1160 (plus whatever data bucket you get)
Total after three years: $1640 (plus whatever data bucket you get)

Payment plan:
Device is $0 down
$27.08/mo device payment = $325 annual (this fee ends after $650 is paid)
$20/mo line access fee = $240 annual
plus whatever data bucket you get
Total after two years: $1130 (plus whatever data bucket you get)
Total after three years: $1370 (plus whatever data bucket you get)

The longer you wait between upgrades, the better of a deal the payment plan is.

Thanks this makes sense. I must be on an older plan or something, as my current bill charges 20 bucks a line for access fee. I have a 5 person family plan. We did have two phones that were on the payment plans, not sure how that changes things for the others, but 3 were on two year contracts with 1 having a subsidized upgrade available and the other two coming due in the next month. Unfortunately looks like this change did rip me off.

 

[boy709]

Still fail to understand how this is possible. I've been holding onto an upgrade and pretty upset about losing it. How is paying full price for a phone spread out over two years cheaper than paying up front? For an iPhone 7, I can pay 199.99 today for a two year contract or can sign up for a payment plan of 27.08 monthly paying a total of 650 over 24 months. I could be completely missing something but always saw the doing away with contracts to actually be a greedy move by carriers to not subsidize phones.

simple... "2 yr contract service" fees are usually about $20-25 more than "pay per month" services.
do the calculation, you usually end up with spending few $$ less on per month deal.

 

[C DM]

Meh, they were the last ones to have them anyway. T-Mobile, Sprint and AT&T ditched them already. The new way is cheaper for like 99% of people too

Except for anyone who isn't on the "newer" plans.
[doublepost=1483660296][/doublepost]

I switched to T-mobile several years ago precisely for this reason. They were among the first to decouple the device from the service so you only paid for what you got.

Of course when AT&T followed suit a few years later they changed the calling & data plan structure to guarantee that the majority of people paid more when they switched off their old contract plan. $5 says Verizon does the same.

Verizon has been doing this kind of thing for some years now too, pretty much the same as AT&T.

 

[Val-kyrie]

Whether it's VZ or anyone else - I find it a bad business practice to charge people an upgrade charge. That's a nickel and diming practice that needs to end. I've usually been able to negotiate it out by nicely asking.

If you buy the phone outright and swap the SIM card yourself, you will incur no fee. I did this myself on VZW.

 

[C DM]

Whether it's VZ or anyone else - I find it a bad business practice to charge people an upgrade charge. That's a nickel and diming practice that needs to end. I've usually been able to negotiate it out by nicely asking.

It looks like the fee went up too as it used to be $20 just a few weeks ago, and now it looks like it's $30.

Despite multiple attempts I've never been able to get out of that fee or have it credited back to me. And that's after being with Verizon for 15 years at this point and having been able to get various bonuses and credits from them here and there throughout the years.

 

[Apple_Robert]

I am all for not being tied to a two year contract. As has been said already, getting a subsidized phone (as a whole) meant having to pay more to the carrier.

 

[Trey M]

This is pretty ridiculous. It's obviously an anti-consumer move, so I don't think Verizon was exactly expecting this to delight anybody.

However, for them to just abruptly announce this on a Thursday afternoon is complete BS. People have been paying these monthly rates for 2 years or more to receive subsidized prices on phones. For them to just revoke upgrades, which is essentially considered a $450 credit for a consumer, without any sort of warning is utterly ridiculous and incredibly greedy.

I expect there will be significant backlash tomorrow which may force them adjust this policy to at least make this a little more fair for existing customers who had upgrades on their accounts. My family would have had 2 upgrades on our account by the end of this month; essentially a $900 credit toward new phones gone with no warning whatsoever.

As someone else said, it's silly to stay on these GF plans now. Will be switching to one of the new plans next week.