I’m a Verizon Wireless customer and their recent change to their plans (no more annual contracts) got me thinking. I’ll elaborate…
When I sign a 2 year contract, let’s pretend I pay $200 for a smart phone that retails for $650. That $450 difference is paid off over the next 2 years of my contract (plus probably some fees, who knows, but we’ll neglect them for now). My total monthly cost is the base price for wireless service + $18.75 ($450/24 months). However, when my 2 year contract is up (and the phone is paid off), if I choose not to upgrade or cancel, my current plan continues month to month at the same total cost.
Does that mean I’m overpaying by $18.75 per month? If so, was there a way around this (I understand that their new cost structure addresses this issue)?
It’s a matter of perspective. There are other carriers who don’t include the cost of an implied phone upgrade into the monthly service fee, so in that respect you’re overpaying by sticking with Verizon. But there’s no way not to pay that extra $18.75 a month, so you’re not overpaying compared to other Verizon customers.
I look at it like this: I’m sticking with Verizon because I like the service coverage and speed, so the monthly cost is the monthly cost. In a completely separate mental compartment, Verizon is willing to sell me a smartphone every 2 years at a heavy discount. Even if I just flipped that smartphone on Craigslist, it would be foolish of me to pass up such a large discount.
And FWIW, their new pricing structure doesn’t really address this issue, unless I’m once again behind the curve. The difference now is that the implied phone upgrade cost ($18.75 in your example) is spelled out in the form of a “service discount”, and it varies depending on the phone you get.
When your contract is paid up you simply switch to the new pricing structure. If you want to upgrade your phone to another $650 phone you either buy one for $650 cash or you buy it for $650 divided into 24 monthly payments. I think this will result in general in people upgrading less frequently.
Verizon’s changed their plan a few times recently. I got my last phone as a subsidized upgrade, but when the contract runs out in a few months I can get a $25/month discount on the plan (so I’ll paying $15/month instead of $40/month for my line-access charge). If I want a new phone I can pay up front or spread the exact cost of the phone over 2 years.
New plans are going to be to $20/month per line, plus however much you want to pay for data and minutes, and however much you want to pay for a phone.
It actually does address this issue- this is one of the many issues where spelling out differences works to someone’s benefit - the benefit of the person who doesn’t want that feature but couldn’t avoid it with the contracts.
I looked at the new plans vs my current plan. Current plan - discounted upgrade every two years , $80 for 10GB and $40 per smartphone. 4 phones costs $240 per month. New Plan - no discounted upgrade, $80 for 12G and $20 per month. 4 phones and more data cost $160 per month. That $80 difference- that was $20 per phone going toward the cost of an upgrade (plus of course the hundred or two I paid at the time of the upgrade). Each upgrade actually cost me between $580 and $680 (or more- I think the discounted rate for some phones was $300). And I upgraded regularly because I was already paying for it - but I won't now, so I'll save $240 per year on at least two of those lines. I'll save money with the new plan. Some people didn't upgrade regularly under contract- they'll save money with the new plan.
This is tangentially an interesting thread to me. I’m sick of paying so much for cell service. I’m with AT&T now, but a buddy of mine is using Cricket Wireless (Atlanta area) and says he did the research to know that Cricket uses AT&T’s network, and it’s quite a bit cheaper. What’s the straight dope on the the pros & cons of switching?
Yes, you’re absolutely right, I misunderstood it and didn’t realize they were dropping the discount. My wife’s contract is up in January and it looks like we’ll save a good chunk of money by switching to the new plan and just not upgrading her phone.
Cricket is what’s called an MVNO of AT&T, which means that’s they resell AT&T’s signal. But that doesn’t make them the same product. First of all, MVNOs typically don’t include any kind of roaming agreement. With the real-deal AT&T service, if you’re somewhere that AT&T’s signal is too weak, your phone will transparently start “roaming” using a Tmobile signal, under a roaming agreement between those two companies, at no extra charge to you. With Cricket and most MVNO’s, if you don’t have an AT&T signal, you don’t have ANY signal.
The other thing with MVNOs is that the customers with full-fledged AT&T service have a higher network priority than the MVNO customers that are riding on the same bandwidth. So when there is high demand/network congestion, the MVNO customers will be throttled and/or lose quality of service.
FWIW, I’d recommend taking a look at MetroPCS, which rides on (and is fully owned by) Tmobile’s network, if you want to go the discount route.
In the past, I had always held onto phones well past the 2-year mark, since I figured I was saving money on not upgrading (in some ways I was). However, I never came to the realization that a portion of my monthly bill included a cost for subsidizing a phone that was fully “paid off”! It was quite sneaky of Verizon, but alas, caveat emptor.
When I reach the 2-year anniversary of my current phone, I’ll be sure to switch to a cheaper service-only rate.
Putting aside contracts for the moment, the only real need to upgrade your phone is you want newer features in a new phone your current phone does not have and/or the wireless infrastructure says it will no longer allegedly support the “old” technology.
Anything else a wireless carrier may tell you is money churning on their part. They will song and dance you just so you spend more for something that may have no real added value for you, but is a money spinner for them.
We’ve had Verizon for years. We used to have two year contracts but upgraded maybe every three to four years, partly because we were lazy and partly because Verizon would eventually come around to us and beg us to upgrade our phones to the point while others bought their subsidized phones from them, Verizon literally gave us the new phones. About 18 months ago, in order to keep our current plan (and not upgrade to a more expensive one Verizon says we must have), we went month to month. We bought our new phones over 24 months so when paid off early next year we will not upgrade the technology. We have no need to do so. At that time we will either stay with Verizon (and whatever plans exist at that time with our fully paid up phones) or go somewhere else.
FWIW we are not slaves to our phones as so many are today. You will never see me texting or reading web or email while walking down the street. I use my phone to actually call people, record things by photographing them I later research at home using a real computer, or use a company app to price check. Social media could die tomorrow and it would not bother me one bit.
Their newer plans where you’re still on a contract (not the Edge plans, in other words) do have a higher charge for the 2 years of the contract.
I had an interesting discussion with a sales rep a couple months ago when we were fighting with them over a stolen phone (we had opted for insurance when we bought it; they never implemented the insurance). He tried to convince me that we should take advantage of the Fathers’ Day special which gave us a “free” phone (well, a 40 dollar activation fee), and go with a family shared data plan. The catch: my phone (out of contract) would have been 15 dollars a month for access. My husband’s phone would have been 40 dollars a month.
Yes, 25 extra a month, for 2 years - that adds up to 600 dollars. So they were expecting us to pay 640 dollars for that free phone. The phone retails, full price, for 650 dollars.
Needless to say, we did NOT take them up on it.
Their older plans did NOT have a price differential for newer phone versus older phone. My son’s phone cost is exactly the same, 3+ years after he got it. It’s actually still on contract (we used his upgrade to get my husband’s new phone so we could preserve my husband’s unlimited data plan). It won’t cost any less when it’s out of contract again, since he has the older single-phone data plan, with minutes shared among the three of us.
Bottom line: check the plans that are available. If you have paid-for phones, you might well be able to switch to a plan with shared data and only 15 a month access per phone.
After our experience this summer, I’m doubtful I’ll ever go for another on-contract phone. You literally save nothing on the cost of the phone, at the expense of losing your portability (and in my case and my husband’s, we’d lose our unlimited data). I’ve already done one full-price upgrade on my phone when my old one became slow to the point of being unusable; my next phone will also be a full-price replacement.
Hah - should have read the whole thread. The scenario I described (that we turned down) apparently no longer applies.
Didn’t read all, but currently I’m a big fan of month to month plans. So far, I have had a $35/month plan from Virgin with a $10 phone and a choice of unlimited minutes, messages, or 3g. However, i switched to a Boost plan for $35/month with a $20 phone with unlimited everything, and $5 extra for tethering. Both plans have no additional taxes.
What kind of luck are you having with data speeds and ability to connect? Just curious.
We gave my daughter my husband’s old iPhone 4 - and it turned out to be cheaper to put her as a Verizon month-to-month customer than to add her to our family plan. For the family plan, it would have been 30 dollars for data, 10 for access to the shared minutes, and 10 (minimum) for texts, due to the way we set up the texting. That’s 50 dollars plus taxes and fees, versus 45 for the monthly for the same data, and unlimited calls / texts.
We finally broke down and changed our texting plan, as I was coming near my limit too often. With an employee discount, it actually wound up being slightly cheaper to go to an unlimited shared plan. So when we get her a new phone (we’ll buy that outright) in a couple months, it may be worthwhile to add her to the family plan.
Or not - we have an odd combination of access (2 out-of-contract lines with unlimited data, 1 in-contract line with 30/month for 2g of data, 700 shared voice minutes). I’m not sure what they’ll do if we try to add a line to that. We may also need to increase our minutes allowance.
It’s all insanely complex - and I think it’s deliberate.
I’m another one on a Virgin Mobile $35 unlimited data, text and talk plan. I live in So Cal and I can’t remember ever needing to use phone and not having a cell connection.
Unless your phone is some sort of statement for you, I don’t see the point in spending more than $50. The “problem” is that phones just keep getting better. The $35 phone I bought a year ago outperformed my three year old expensive phone by a mile. As they say, “A rising tide lifts all boats” and you might be surprised at how nice some lower tier phones are these days.
I believe (based on looking into a couple days ago) that Verizon has (at least) two plans. One where you get a phone discount but pay extra for service, and the Edge plan where service is cheaper but no big discounts on the phone; instead you pay monthly for it (with no interest).
I’ll be talking to them today since I need a new phone and I’ll get back with latest details.
I tend to keep phones longer than 2 years, so I won’t want the “discount”.
For what it’s worth, regarding low cost carriers, my girlfriend has Cricket and within our immediate area (DC/MD/VA) she generally has good service. There’s a dropped call every once in a while, but the low cost + unlimited data makes up for it.