Verizon Eliminates Two-Year Contracts for Smartphone Upgrades

[4jasontv]

Those who are on an older plan that they like and want to keep benefit from subsidized devices and contracts as they would be paying the same amount whether or not they get a cheaper or potentially free device, so being able to get a cheap or free device is certainly beneficial to them over getting a new device on a payment plan or outright as they would pay the full price for it essentially rather than just a part of it or perhaps nothing at all (again, this is assuming someone wanting to stay on an older plan).

As far as additional things coming into play with contracts in relation to next device purchase and contract, there definitely have been additional perks like New Every Two around that would play a role, but they haven't been there for quite a few years now and more than likely wouldn't be of essentially any consequence to anyone at this point or in the recent past.

In summary:
Sentence 1 is gibberish.
Sentence 2 repeats what I said.

Seriously. The best I can make out is that you you're saying that people who are happy overpaying should be allowed to continue to do so.
[doublepost=1483715513][/doublepost]

$199.99 + $40 upgrade fee and tax on 2 year, then $40/month for the line for 24 months.

Or tax and upgrade fee up front (about $80) then a $20 access fee with the $27.08 device payment for 24 months.

40x24 (2 year contract service) = 960 + 250 (up front cost) = 1,210 (total 2 year cost)

42.08x24+80 = 1089.82.

It might not be a huge savings, but it does cost the customer less. With the added obvious benefit of not being on a 2 year contract.

I'm having trouble following you. Are you assuming the cost of the device is the same? Are you assuming the monthly plan goes down because they are no longer subsidizing the device?

 

[JasonMR]

Are people actually arguing that contracts are good or don't matter? You can get steep discounts on Device Payment Plans, but you will never get a discount on the contract. During the holidays, you could get a Moto Z for $120 on DPP w/ a $20 activation fee and $20/mo line fee. At the same time, a contracted phone was $200 up front + $40 activation fee + $40/mo line fee x24 mo. Basically a contract locks you into paying $500 beyond the up front cost of the phone to Verizon over 2 years. You will never get this discounted.

 

[i hate phones]

Not anymore. that was discontinued a while back.


Where you getting $80 more from? $80 a month?

Nope not BS. She was very knowledgeable. And I switched plans not new phone, bonus data was expiring. Maybe you should check into it. That was discontinued some time ago.

yeah that is for the new plans. The month-2-month credit has been discontinued.

I'm on the more everything loyal 6GB plan and I still get the $25 credits. They don't get applied automatically, when your line's contract is up you have to ask for the discount. I just had the discount applied to my 3rd line in December. It's the only reason I won't change to a new plan. I don't want my access fee to go from $15 to $20
[doublepost=1483717223][/doublepost]

Already checked my bill and don't think this is the case. My plan is already being charged 20 dollar access fee per line, not 40. So still unsure how this isn't a complete ripoff to me. I'm losing out on two device subsidies (total of 450 each, 900 total) and am paying the exact same amount monthly. So I save 10 bucks every two years on the activation fee (30 for monthly, 40 for two year).

What plan are you on? and are your lines currently still under contract?

 

[albinousrex]

I'm on the more everything loyal 6GB plan and I still get the $25 credits. They don't get applied automatically, when your line's contract is up you have to ask for the discount. I just had the discount applied to my 3rd line in December. It's the only reason I won't change to a new plan. I don't want my access fee to go from $15 to $20
[doublepost=1483717223][/doublepost]

What plan are you on? and are your lines currently still under contract?

Not sure the exact name, the data plan is XXL with 24 GB's monthly. We have 5 lines. 3 are on monthly payment plans two are on two year contracts. One of the two was upgrade eligible until they did away with that yesterday (so no longer under the two year contract). The second is coming up here shortly.

 

[i hate phones]

Not sure the exact name, the data plan is XXL with 24 GB's monthly. We have 5 lines. 3 are on monthly payment plans two are on two year contracts. One of the two was upgrade eligible until they did away with that yesterday (so no longer under the two year contract). The second is coming up here shortly.

So the one that is still under contract should have a $40 access fee and the rest of the lines should be $20. you're sure they're all 20?

 

[konqueror4u]

Good. Contracts plan needs to go some day. With rising operating costs absorbing the cost of the phone as part of 2 year contract will not work for the carriers.

 

[awer25]

I have a business account with two lines eligible for upgrade, and I can still upgrade them with the cheaper 2-year contract pricing. It looks like it doesn't apply to business accounts (unless it is still rolling out, in which case I'll be pretty pissed if I lose these upgrades).

 

[4jasontv]

Good. Contracts plan needs to go some day. With rising operating costs absorbing the cost of the phone as part of 2 year contract will not work for the carriers.

1. US Handset costs are typically paid by the consumer regardless of the cost. The average device cost is used to set monthly plan price. It is one of the reasons the US has some of the highest consumer. Loss of subsidized pricing should have seen a plan decrease equal to the average cost of the device. It doesn't appear to be the case even when you account for the lower wholesale cost of the equipment.
2. Wireless Telecom accounts for 80% of the profits and their capital expenses are only 13% their total revenue. (http://www.fiercewireless.com/wirel...nues-to-expand-4-2016-t-mobile-seen-as-victor)
3. Wireless DATA revenue is a guarded secret because carriers are using tax strategies where they can lower the perceived profit by deducting equipment costs for maintaining things they already own. This is similar, but not exactly the same, as how drug companies squeeze extra profits by claiming R&D costs on a new use of an existing drug.
4. Revenue generated by wireless telecom equipment manufacturers is increasing to due to increased spending by service providers despite the fact that equipment and operating costs have decreased. This decrease in cost is primarily due to larger orders being placed and more efficient operation.

 

[albinousrex]

So the one that is still under contract should have a $40 access fee and the rest of the lines should be $20. you're sure they're all 20?

Actually looking at it again and accounting for my terrible mental math, I think they are charging 40 on all lines. I'll give them a call and try to sort this out. If I really should have been getting 20 on the non contract lines, wonder if they would backdate anything. Either way, that's an instant savings of 100 bucks on my monthly bill.

 

[sclawis300]

In summary:
Sentence 1 is gibberish.
Sentence 2 repeats what I said.

Seriously. The best I can make out is that you you're saying that people who are happy overpaying should be allowed to continue to do so.
[doublepost=1483715513][/doublepost]

I'm having trouble following you. Are you assuming the cost of the device is the same? Are you assuming the monthly plan goes down because they are no longer subsidizing the device?

Its called unlimited data. Some of us would like to keep it. First I had to deal with them screwing with my download speeds and LTE, then I had to deal with them jacking up the price, now they are trying to make me pay full price for something I already had waiting. I was sitting on 3 upgrades with a 4th one coming soon. That is over $1,600 benefit.

 

[Weaselboy]

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

You are mistaken. Once you have fulfilled your two year contract that covered the subsidy, you can switch to another plan that is less costly. I did this last year and my Verizon bill dropped by $20, plus the new plan included more data allowance.

 

[sbailey4]

I am very glad that it worked out for you.
My family of 3 lines did not see any price difference after AT&T eliminated the 2 year contract.

This is about Verizon though not ATT so that doesn't really mean much to this particular topic. Just saying

$199.99 + $40 upgrade fee and tax on 2 year, then $40/month for the line for 24 months.

Or tax and upgrade fee up front (about $80) then a $20 access fee with the $27.08 device payment for 24 months.

40x24 (2 year contract service) = 960 + 250 (up front cost) = 1,210 (total 2 year cost)

42.08x24+80 = 1089.82.

It might not be a huge savings, but it does cost the customer less. With the added obvious benefit of not being on a 2 year contract.

I think you made a mistake in the bold. Should be $47.08 x24 yes? But still this it typically better than the old way not worse. I saved quite a bit by changing plans to get away from the "subsidy" plan.

Actually looking at it again and accounting for my terrible mental math, I think they are charging 40 on all lines. I'll give them a call and try to sort this out. If I really should have been getting 20 on the non contract lines, wonder if they would backdate anything. Either way, that's an instant savings of 100 bucks on my monthly bill.

I doubt it. $40 IS the line access cost for the old plans now. To get the $20 you will have to change to the new plans. They did away with those month-to-month discounts for non contract lines a while back. But hey doesn't hurt to ask tho

 

[Bobotherabit]

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

Ripoff!!! I have a Verizon phone I got for $70 my monthly plan is $55 and I get 3gigs data.dont buy your phone from Verizon and if you go with Verizon get a prepaid account way cheaper

 

[4jasontv]

Its called unlimited data. Some of us would like to keep it.

I'm not saying you have to get rid of it, but all unlimited plans were offered when they charged you more per month. If you buy a phone full price they should refund you the subsidy.

First I had to deal with them screwing with my download speeds and LTE,

Which was wrong of them.

then I had to deal with them jacking up the price,

also wrong.

now they are trying to make me pay full price for something I already had waiting.

Agreed. They should lower the cost of the plan but let you keep it. We are arguing for the same thing - it seems.

I was sitting on 3 upgrades with a 4th one coming soon. That is over $1,600 benefit.

That's where things get tricky. You are owed the discount on your plan because the old one is paid off. If you are keeping your plan then you should buy the phone full price (which you now have to). Again, the phone doesn't need a discount, the service does. If you want to think of it as the same, that's fine.

 

[C DM]

In summary:
Sentence 1 is gibberish.
Sentence 2 repeats what I said.

Seriously. The best I can make out is that you you're saying that people who are happy overpaying should be allowed to continue to do so.
[doublepost=1483715513][/doublepost]

I'm having trouble following you. Are you assuming the cost of the device is the same? Are you assuming the monthly plan goes down because they are no longer subsidizing the device?

Not sure what's complicated. If someone who has an older plan that they like and want to keep on using then subsidized phones would usually be a better deal for them compared to device payment plans (perhaps short of recent developments of various credits being offered for those as part of some sales/promotions) or buying the phone out right.
[doublepost=1483730726][/doublepost]

Are people actually arguing that contracts are good or don't matter? You can get steep discounts on Device Payment Plans, but you will never get a discount on the contract. During the holidays, you could get a Moto Z for $120 on DPP w/ a $20 activation fee and $20/mo line fee. At the same time, a contracted phone was $200 up front + $40 activation fee + $40/mo line fee x24 mo. Basically a contract locks you into paying $500 beyond the up front cost of the phone to Verizon over 2 years. You will never get this discounted.

Now that these credits/discounts started to be offered during some sales or promos there's certainly more there that can make a device payment plan a better deal than that payment plan simply being a way to pay off the full price of the device over a period of time, which is what it used to be until very recently.

 

[mdriftmeyer]

Same thing for me, things remained $40 even after 2 year terms were up for my More Everyrhing Plan. I was aware when we got the contract that was the case.

Basically, what you're saying is the $480 for this latest 2 years is null and void, screwing you out of it, while they reaped your investment throughout the current length of contract, right? That smells of a contract settlement.

 

[Apple_Robert]

Ripoff!!! I have a Verizon phone I got for $70 my monthly plan is $55 and I get 3gigs data.dont buy your phone from Verizon and if you go with Verizon get a prepaid account way cheaper

Are you on an old contract? Verizon doesn't offer 3 gig single line plans anymore. I pay $50.00 for 7 gig (4 gig plan with 3 extra gig promotion that doesn't expire) plus $20.00 line access and taxes.

 

[4jasontv]

Not sure what's complicated. If someone who has a good older plan that they like and want to keep on using, then subsidized phones a better deal to them than device payment plans or buying the phone out right.

That was not what your original run on sentence said. The older plans charged more to cover a subsidized phone they already received. If they pay full price or do an interest-free payment plan they are paying for the device twice. Once at POS and once each month. That's an artifact of their plan. That is not good for the customer.

As you have said in previous posts in this thread, they are under no obligation to continue to offer device subsidies on new phones because the higher price paid was to cover the old device you had been using. If they offered to continue to do that though customers who don't upgrade the day they become eligible fall back into the trap of paying for a device they have already paid off. Sure, it might only be overpaying a few dollars but its a byproduct of staying on a plan that includes the cost of the device.

That said, I concede that there may be people who use so much data it offsets that cost. And those people have been treated like criminals by Verizon for so long I don't understand why they stick around. I feel like they are trying to stick it to them, but VZW is still profiting off them even if they use 300 GB a month. It's like they are dating someone they don't like. They are going to treat them terrible while at the same time pointing out all the other people who are much more attractive. Abusing a handful of 6's does nothing more than let the 9s who want them know they have to stay a 9 if they want to be treated well. You argue it's financially good for them. I disagree because VZW offsets that benefit by making use of their service counterproductive to intended function. They slow down speeds, restrict coverage areas, and blacklist access to newer features.

 

[C DM]

That was not what your original run on sentence said. The older plans charged more to cover a subsidized phone they already received. If they pay full price or do an interest-free payment plan they are paying for the device twice. Once at POS and once each month. That's an artifact of their plan. That is not good for the customer.

As you have said in previous posts in this thread, they are under no obligation to continue to offer device subsidies on new phones because the higher price paid was to cover the old device you had been using. If they offered to continue to do that though customers who don't upgrade the day they become eligible fall back into the trap of paying for a device they have already paid off. Sure, it might only be overpaying a few dollars but its a byproduct of staying on a plan that includes the cost of the device.

That said, I concede that there may be people who use so much data it offsets that cost. And those people have been treated like criminals by Verizon for so long I don't understand why they stick around. I feel like they are trying to stick it to them, but VZW is still profiting off them even if they use 300 GB a month. It's like they are dating someone they don't like. They are going to treat them terrible while at the same time pointing out all the other people who are much more attractive. Abusing a handful of 6's does nothing more than let the 9s who want them know they have to stay a 9 if they want to be treated well. You argue it's financially good for them. I disagree because VZW makes using the service a suffer.

That is what I originally said as well. The underlying point, as you essentially agree as well, there are people that would pay more to get a new device using device payment plan or buying the phone outright compared to getting a subsidized device in exchange for a contract, and generally that's because of older plans that they have. Now, their reasons for staying on those plans, or how VZW is making out with more money from those people or treating those older plans, those certainly can have some points to them, but they are unrelated to what I was bringing up.

 

[i hate phones]

I doubt it. $40 IS the line access cost for the old plans now. To get the $20 you will have to change to the new plans. They did away with those month-to-month discounts for non contract lines a while back. But hey doesn't hurt to ask tho

It's not advertised, but they didn't do away with it. It doesn't apply automatically when your contract ends, you have to ask for it. I just chat them on their website and ask for them to apply the off contract discount to whatever line. I have a $25 discount on 3 lines, last line just started it in December. I'm on the more everything loyal 6gb plan.

 

[C DM]

It's not advertised, but they didn't do away with it. It doesn't apply automatically when your contract ends, you have to ask for it. I just chat them on their website and ask for them to apply the off contract discount to whatever line. I have a $25 discount on 3 lines, last line just started it in December. I'm on the more everything loyal 6gb plan.

Officially they stopped offering that for lines that didn't have that discount applied to them at some point before. Lines that had it before generally can get it again (even potentially automatically) when it would be applicable to them. For lines that never had it it's not something that is supposed to be available, at least not officially. Of course, it's certainly possible that some agents might overlook that or do it as some incentive (kind of like in some instances some people can get out of paying activation/upgrade fees, while many others they don't).

 

[4jasontv]

That is what I originally said as well. The underlying point, as you essentially agree as well, there are people that would pay more to get a new device using device payment plan or buying the phone outright compared to getting a subsidized device in exchange for a contract, and generally that's because of older plans that they have. Now, their reasons for staying on those plans, or how VZW is making out with more money from those people or treating those older plans, those certainly can have some points to them, but they are unrelated to what I was bringing up.

I think I see the problem. Equipment cost and service plan are essentially the same thing in the end. You have to add them together. So to evaluate this rationally you have to consider how the costs are broken up. Subsidized pricing plus subsidized phone is equal to unsubsidized pricing plus unsubsidized phone over the first two years. An $80 a month plan with a phone that costs $20 a month, on day 731, not subsidizing a phone is $0.66 a day cheaper. You save nearly $5 every week you don't upgrade your phone. It's all tied together.

 

[i hate phones]

Officially they stopped offering that for lines that didn't have that discount applied to them at some point before. Lines that had it before generally can get it again (even potentially automatically) when it would be applicable to them. For lines that never had it it's not something that is supposed to be available, at least not officially. Of course, it's certainly possible that some agents might overlook that or do it as some incentive (kind of like in some instances some people can get out of paying activation/upgrade fees, while many others they don't).

I know it's not advertised, but when I initially asked about it, they said I just need to contact them when my contract is up. each time a line's contract ended I contacted them and they didn't even question me, just applied the discount. First line was Nov 2015 second line was Sept 2016 third line was Dec 2016

 

[Bawstun]

Great, now nobody will have a reason not to switch. They don't even exempt data from Spotify or Pandora or any music whatsoever. Video I understand, YouTube I get. T-Mobile goes far and beyond what is necessary to exempt. But for Verizon to offer nothing...LMAO. It's a slap in the face to be their customer, unless you are grandfathered to unlimited right now. Even their data prices are crazy...

 

[C DM]

Great, now nobody will have a reason not to switch. They don't even exempt data from Spotify or Pandora or any music whatsoever. Video I understand, YouTube I get. T-Mobile goes far and beyond what is necessary to exempt. But for Verizon to offer nothing...LMAO. It's a slap in the face to be their customer, unless you are grandfathered to unlimited right now. Even their data prices are crazy...

Well, there are still reasons beyond that, like coverage that might be better for someone, for example.