Verizon Ends Smartphone Subsidies

JoeyRox writes: Verizon has discontinued service plans that include subsidies for upgrading a smartphone. The new plans require customers to pay full price for their smartphones, either up front with a single one-time purchase, or by monthly payments. Unlike their previous subsidized plans, Verizon's new plans don't require a long-term commitment. Under the new plan, Verizon will charge flat fees for connected devices: $20 for smartphones and $10 for tablets. Subscribers will be able to pick from four data monthly packages to go with their devices: 1GB for $30, 3GB for $45, 6GB for $60, and 12GB for $80. The changes go into effect on August 13th. Existing subscribers will get to keep their current plans

Comments

Overall change in the bill

[armanox]

So essentially, no change in the bill from what I'm seeing right now.

Re:Overall change in the bill

[SecurityGuy]

Depends on how you use your phone. If you don't tend to get the latest and greatest phone, you'll save money. If you tend to keep your phone longer than 2 years, you'll save money. I do both, so this looks like a win for me.

Re: Overall change in the bill

[Iniamyen]

As long as the diary contains no animal-based paper or ink products, I don't see why not.

Re:Overall change in the bill

[PopeRatzo]

So essentially, no change in the bill from what I'm seeing right now.

Stay optimistic. It's so rare these days.

Re:Overall change in the bill

[Jane Q. Public]

I think they're finally bowing to the practice of allowing unlocked phones.

However, in the process, they're raising everybody's bill! Because they're charging the same amount, if not more, but they're not subsidizing your phone purchase anymore.

Ridiculous. Especially since THEIR cost/minute has been going steadily down. I had reasons for not doing Verizon. And over time, it has looked like those reasons were good.

Re:Overall change in the bill

[Jane Q. Public]

So Jane Q. Public really is the man-child named Lonny Eachus who appears in social media dressed as a Nazi: http://slashdot.org/comments.p...

No comment on identity, but I can certainly say with confidence that this post's sole purpose is obviously attempted character assassination.

Re:Overall change in the bill

[Jane Q. Public]

Nobody is "pretending" to be anybody. The only STRANGE thing going on here is someone who "pretends" (or maybe not?) to know what I do with half my time. How much time do YOU spend following what I do?

Re:Overall change in the bill

[Jane Q. Public]

If you weren't just pretending and you actually believe that then you're even more delusional than I thought. Which is really saying something.

Your persistent attempts to misrepresent my statements out of context and out of time say a lot more about you than they do about me.

You have been consistently and persistently dishonest over a period of years. And yes, I can back that up.

Re:Overall change in the bill

[Jane Q. Public]

So what context explains your claim that "most people who bothered to look actually have referred to me as a gal"? Or was that just something every pathological liar said "out of time" way back in the dark ages of... 2013?

Again with the out-of-context. That is something that pathological liars commonly do. Especially when you've had it pointed out to you, easily more than 20 times. Probably several times that by now.

Yes, most people who bothered to look at the name "Jane Q. Public" have referred to me here on Slashdot as a gal.

Why do you have such a problem with that?

Re:Overall change in the bill

[Jane Q. Public]

And yes, 2 years or more ago is "out of time". You have often brought up things I've said 5 and more years ago... which just illustrates your strange, unhealthy, stalkish obsession about me. Which I've also publicly pointed out many times.

You're a weirdo, man. A harassing, lying, out-of-contexting, libeling, whacko. This behavior of yours is NOT normal.

And I don't have to worry about backing that claim up with facts up because I've already done so many times over, and there are records of most of those times.

Re:Overall change in the bill

[mysidia]

but they're not subsidizing your phone purchase anymore.

Then everyone should switch to ATT next time they need to upgrade their phone.

Re:Current plan

[erebus2161]

Yep, had my unlimited data plan until Dec. '14 when I chose to give it up for a subsidized phone and still have my nationwide talk 450 plan because it was $5 cheaper than the cheapest currently offered plan.

Re:Current plan

[laurencetux]

so who wants to start a pool on what percent of existing subscribers are still on the old plans in say 120 days??

5 bucks to buy a ten percent block in the format ?[0-9] so first block is 00-09 second is 10-19 third is ...

Full Price Smartphones

[OrangeTide]

I predict this will drive down the average price of smartphones, as consumers are going to aim for lower cost options more aggressively. Average meaning that there will still be $700+ smartphones, but there should be growth in the $199 smartphone market.

It somewhat relates to the Apple versus Android divide, a lot of iPhone owners are using subsidized phones on contract, especially those using the latest model. When I was shopping around for pay as you go plans and a new phone, meaning I pay full price for my phone, I saw good options in my price range for Android and older iPhone models. I don't know how well Apple will fair if people are buying the previous model instead of the latest.

Re:Full Price Smartphones

[Anonymous Coward]

By the time you do the monthly payment plan via Verizon you're going to end up paying what you likely pay for the 2 year contract. I doubt there is going to be a substantial cost difference. Verizon already had/has plans of this nature.
 
But what this does do is makes me wonder if Verizon is preempting some kind of regulations they may see coming down the pipeline that is going to force carriers to break their phones from their plans. You hear plenty of Euros on here who are saying that's how it works for them. This may be the case.

Re:Full Price Smartphones

[Thelasko]

By the time you do the monthly payment plan via Verizon you're going to end up paying what you likely pay for the 2 year contract. I doubt there is going to be a substantial cost difference. Verizon already had/has plans of this nature.

I also notice they don't charge interest on those monthly payment plans. There's still some subsidizing going on...

Re:Full Price Smartphones

[Firethorn]

There's still some subsidizing going on...

Subsidization, or built into the advertised price of the phone?

Re:Full Price Smartphones

[mlts]

If a cheap smartphone has a SDxC slot, for most things, it will do just as well as a flagship phone for a lot of people.

All and all, smartphone prices are lower than they were about 8-10 years ago, when a high end HTC Windows Mobile phone (HTC Athena for example) would run you $1200, and that with a two year plan on top of it.

With phones starting to hit the "good enough" market point like how desktops and laptops have done, I wouldn't be surprised to see Android as an OS adapt to this in the next year or so, evolving to try to bring more to lower-tier hardware with 512 megs of RAM and at most 8 GB of storage (including apps.)

Of course, people will want the latest and greatest, but the last round of updates for phones was for pay functionality, which is used by a few people, but for the masses, generally not bothered with as opposed to sliding a credit card through the machine.

I wonder if a $200 phone will wind up being the new normal. In this market, with people paying full price for the phone up front, I wouldn't be surprised if ZTE or Huawei becomes the popular makes of devices as opposed to HTC, Samsung, or Apple.

Re:Full Price Smartphones

[tlhIngan]

I predict this will drive down the average price of smartphones, as consumers are going to aim for lower cost options more aggressively. Average meaning that there will still be $700+ smartphones, but there should be growth in the $199 smartphone market.

It somewhat relates to the Apple versus Android divide, a lot of iPhone owners are using subsidized phones on contract, especially those using the latest model. When I was shopping around for pay as you go plans and a new phone, meaning I pay full price for my phone, I saw good options in my price range for Android and older iPhone models. I don't know how well Apple will fair if people are buying the previous model instead of the latest.

Actually, the cheap smartphones ARE where all the Android growth has been - your $199 price point is right now subsidized to the "free with contract" or "two free" and so on. Android's explosive growth has almost been exclusively in this area - few are buying the flagships by comparison.

On the iOS arena, subsidies do help - but that's because no one wants a last-gen iPhone - even the free with contract iPhones don't really sell.

I don't think it would hurt Apple all that much - remember the iPhone originally was sold without contract and at full price, and they had healthy sales.

It might hurt Verizon though - if other carriers still subsidize, then there's no reason to buy a Verizon iPhone and they might switch., And even if you're on Verizon, it'll be better to buy from Apple direct as it will be unlocked if you're paying full price - Apple sells full price iPhones unlocked.

Also, it could actually hurt Samsung, HTC, etc., as those full price Androids will cost as much as an iPhone and if they weren't going to buy some cheap Android phone, but looking at the flagships, then the iPhone pricing might attract buyers - if you're spending $700 on a phone...

Re: Full Price Smartphones

[Karlt1]

There is a whole world out there that has never had subsidized phones and one of the major U.S. carriers has never sold the iPhone subsidized.

Re:Full Price Smartphones

[KGIII]

I do not recall the specific regulations but I seem to recall that they can not charge interest on a purchase. You need to be a lending facility to advertise such. You can itemize the rates as all sorts of things but you can not call them interest - as I understand. Stores, in store credit, can also only do 'interest free' for so long which is another strange rule. I understand that it varies by state but this is generally true and there are some federal laws that must be met in order to charge interest at all. I believe those stores where you rent to own shit at absurd prices do not directly charge interest because of this. They still charge it, do not get me wrong, it just is not called interest. Where it is allowed, and called interest, then I think that has to be a separate division (or something like that) and then there is a limit to how long they can go interest free and some shit. Cars are financed by a real lending institution and can have long interest-free periods. Your local store can not UNLESS it has some sort of partnership with a lending facility such as a local bank.

I may be missing something (or completely wrong) but that is how I understand it - having asked about this in the past from someone who knew such things. They could have been wrong or I could have misunderstood but it fits.

Re:Full Price Smartphones

[KGIII]

So............ Umm.... Yeah.... So.... I, uh... I clicked the link in your response. I am not sure what I was expecting. I do have a question. What does the link have to do with the conversation? No, I really do want to know how you connect the conversation and that link together.

Re:Full Price Smartphones

[Solandri]

I don't think it'll do much to the average (mean) price of smartphones. The median price will probably drop though. In other words, more people will be buying lower priced phones, while the price of high-end phones wealthy people buy will go up. That's pretty much how the rest of the computer industry works (graphics cards are an extreme example, with people who can afford high-end cards paying 3-4x more for roughly 2x the performance).

As for Apple vs. Android, I've suspected or a while that Android buyers have been subsidizing iPhone buyers. True the high-end Android phones are priced similarly to the iPhones. But the bulk of Android sales are the lower-priced models, which are often half to a third the cost of an iPhone when purchased outright. But you look at the carrier subsidized pricing and the iPhone will be $199 down, while the mid-tier Android phone will be $99 down. In other words, the full price of the iPhone is ~$400 more, but the carrier is only charging $100 more for it. That means either the carrier is losing $300 on the iPhone, or they're making $300 extra on the Android phone which is effectively subsidizing the iPhone price.

If that goes away and the $400 mid-tier phone now costs $400 vs. $800 for the high-end phone, then yes it will hurt sales of those high-end phones.

Re:Full Price Smartphones

[MrL0G1C]

Or people will hang on to their phones longer, I bought my smart-phone over 2 years ago and it still copes nicely, still has good battery life and now I'm saving a lot of money vs the habitual up-grader and their 'subsidised' contract. Of course if you look at the cost of those contracts you see you're just paying a ton a month instead.

The Verizon prices are huge compared to UK prices, you get 6GB + unlimited talk+texts for $24 here and $8 a mo gets you 250mins/250texts/250mb data (or more).

Re:Full Price Smartphones

[karnal]

This is already the case. Look at some of the pay as you go phones for cheap - you can get an android device that is absolutely solid for $10 on sale. The LG Optimus Fuel, which is $10 at Kroger stores around the US right now has 512MB RAM, dual core processor and almost 2GB of onboard - plus a 4GB Microsd card included. Runs KitKat.

Re:Full Price Smartphones

[samwichse]

Either way, I've got a short position on Apple's stock. There's no way they can keep milking the margins they are out of a single tech product... if I hear one more time how someone's iPhone only cost them $100-200...

Still Too Expensive

[HappilyUnstable]

And they're still charging too much for the amount of data.

No thanks.

Re:Still Too Expensive

[tepples]

How would you recommend to use the same spectrum to move more data to more customers?

Re:Still Too Expensive

[CastrTroy]

I agree. I'm currently paying $40 a month for Unlimited talk, text, and data ( 5GB at full speed), with caller ID and voicemail. I'm in Canada on Wind. Only downside is that it's only unlimited when I'm in the city. Works great for me since I don't tend to travel that much, and I'm not going to pay every month for something that I will only use a couple weeks out of the year.

Re:Still Too Expensive

[tepples]

Why should I care how they do it? Other companies are noticeably cheaper

To which "other companies" do you refer? Do you mean Sprint and its MVNOs (Boost, Virgin, Ting, etc.)? These are reported to have noticeably poorer signal coverage than Verizon in many parts of the United States. Or do you mean cellular carriers in other countries?

Secondary Effects

[SlashdotOgre]

It will be interesting to see how this impacts third party retailers like Best Buy, Costco, etc. I doubt the higher price per customer will make up for the volume of customers who will delay or avoid purchases at full price (particularly at the mid-to-high end). Will retailers continue to offer discounts on phones as a loss leader or take the hit to their revenue? Likewise, I expect demand for second hand phones to increase as well (leading to higher prices there).

It will also be interesting to see how this impacts VZW's customer numbers in the long run. They're somewhat safe in the short term as people are going to still be on their current contracts for a while. As the LTE phones are substantially more portable than the previous generations of CDMA phones and now new customers are no longer in a monthly contract, I would expect a decrease over time. I think they're over estimating their market power, but I guess only time will tell.

Re:Secondary Effects

[EndlessNameless]

Will retailers continue to offer discounts on phones as a loss leader or take the hit to their revenue?

Retailers typically get a kickback for new activations and renewals processed through their registers, so they have some leeway to go below cost and remain profitable.

I assume they will push for cheaper phones, as electronics stores usually see higher margins from cellular (as opposed to computers, gaming consoles, appliances, and games/movies/music).

Re:Secondary Effects

[John.Banister]

Now that new expensive phones almost all have IMEI numbers, if there's a stolen phone blacklist shared among carriers, that list could also be used to enforce payment for phones bought with loans. If vendors can get this sort of cooperation from carriers to make lending money for phone purchases less risky, there's certainly a big difference in the interest rates for secured loans and the ones for credit cards. Maybe Best Buy could sell ~$700 phones for 15% down + $10 for the credit check + 6% interest (and use the extra loan processing time to upsell you insurance on your investment).

Re: Secondary Effects

[Karlt1]

All of the major carriers already have no interest rate loans for phones and you can sign up for the plans through retailers.

sounds simpler

[r-diddly]

Sounds like a long-overdue simplification of their ridiculous & Byzantine pricing structure. Too late for them to keep me as a customer, but a step in the right direction.

Full Price?

[bogie]

A lot of people are going to choke on the idea of paying full price. $199 every 3-4 years doesn't seem like a big deal. $700 for a new iPhone sounds fucking horrible.

I also wonder how this will affect corporate customers as well who are used to getting say a 5c free or cheap from Verizon for their employees?

Re:Full Price?

[Archangel Michael]

Boon to companies like OnePlus (unfortunately, doesn't work on VZ) in the long run.

Re:Full Price?

[Jaime2]

Next step: do what AT&T did - offer financing (not technically the next step since they already offer this). Instead of upgrading your contract every two years and getting a discount on a phone, you finance a new phone every two years. One big difference is that with the finance model, your bill goes down if you keep the phone longer than the finance term. In the old model, if you didn't upgrade, you continued to pay the price that had the subsidy baked in.

This also helps with customer retention - as long as a customer has a phone that's not yet paid off, they will have difficulty changing carriers. To the customer, having to pay off the phone isn't a whole lot different from having to pay a contract termination fee.

Re:Full Price?

[drinkypoo]

A lot of people are going to choke on the idea of paying full price. $199 every 3-4 years doesn't seem like a big deal. $700 for a new iPhone sounds fucking horrible.

Or a couple hundred bucks for a mid to low end Motorola phone running Android and with a readily unlockable bootloader, which sounds pretty decent, eh? I only wish my Nexus 4 had held out long enough for the 2GB model to appear.

Re:Full Price?

[chmod a x mojo]

In some ways it's better than the old way. Here's how it works( same type deal from US cellular ) with US Cellular:

Want phone X which is $700 > Pay $700 OR pay $700 / #months in contract per month. Flagship phones like galaxy S6 are ~$40/ month + data package ( unlimited text, MMS, and voice included ). It turns out to be about the same, or cheaper than the old voice + text + data packages usually, then cheaper once the phone is paid for.

Oh, and with US Cellular ( probably verizon too) you can pay the phone off earlier, meaning plans are actually quite a bit cheaper... for the same amount of data on these new plans, after paying off a phone ( say after 3 months or so ) I save $45, and gain unlimited voice ( not that I ever came NEAR using what I had before but still... ).

Re:Full Price?

[tepples]

Next step: do what AT&T did - offer financing

And T-Mobile even before that.

Re:Full Price?

[SecurityGuy]

They offer a payment plan. It used to be $40 for a smartphone and $0 to $300 for the phone on a 2 year contract. Now it's $20/month and $5-30/month for the phone if you get a payment plan. If you want to pay less than you were, just pick a phone that costs $20/month or less.

Re:Full Price?

[tompaulco]

A lot of people are going to choke on the idea of paying full price. $199 every 3-4 years doesn't seem like a big deal. $700 for a new iPhone sounds fucking horrible.

Well, it should be easier to stomach when the price of the plan goes down by $30 a month because you are not subsidizing a phone. Wait, the price of the plan doesn't change? Oh, nevermind, they are just screwing us then.

Re:Full Price?

[cbhacking]

It is kind of funny watching the rest of the US "big 4" (of which TMo is the smallest) copy T-Mobile. Explicit loans (or purchases) instead of "subsidized" purchases (that you pay more for in the long run), unlimited talk and text as standard features, paying off your ETF if you switch from another carrier and turn in your old phone, etc. In the end, though, it's good for us all.

Have any of them caught on to the free international roaming (free text and low-speed data, cheap voice over cell or free over WiFi, keep your number and no need to change SIMs) yet? I spend at least a few weeks a year outside the country, usually visiting multiple countries in one trip, and knowing I'll be able to use my phone in each one as soon as the plane lands is glorious.

Re:Full Price?

[DoctorBit]

If someone wants to buy a cheap TV for $200 do they insist on getting financing from the manufacturer? No, they use their credit card. Why would a phone be any different? I also don't get it why anyone would want to buy a phone from Verizon in the first place. Do people want to buy a toaster from their electric company or a car from their local gas station? Carriers should be in the business of providing a monthly data allotment and nothing more. Hopefully, this change is the first step towards a more competitive marketplace. More competition should eventually lead to *fully* open-source cheap and powerful phones.

Re:Full Price?

[KGIII]

US Cellular also gets to use the Verizon towers though OTA updates do not push through them if you are out of the area for a while. Anyhow, USC is the only mobile company I have ever seen that has actively tried to lower my bill on a fairly regular basis. I have plenty of money so it really does not matter but they almost always have some sort of offer that claims to cost me less on my overall bill. The few times I have taken advantage of this, it really did save me money on my bill. They moved me to some new plan with unlimited voice, text, and a bunch of data. Prior they moved me into a strange plan with just voice, text, and data. Before that they moved me to voice, text, and data. All of them were different than what I had. Another good thing they do is they kill your voice mail if you ask - quickly. Unfortunately, every time I do change my plan (and I am paying less now than I ever have - I think?) they turn the voice mail back on. So, I call them and they turn it off again... This has happened many, many times.

Re:Full Price?

[Solandri]

A lot of people are going to choke on the idea of paying full price. $199 every 3-4 years doesn't seem like a big deal. $700 for a new iPhone sounds fucking horrible.

The way T-Mobile does it, there's really not much difference from paying $199 every few years. T-Mobile charges $20/mo if you don't pay for the phone in full. So over a 3 year contract that's $720. Add the $199 you paid up front and you've paid $920 in total for your subsidized phone. Not much different than if you'd bought it with a 3 year loan.

The only difference this makes (and it's an important one) is that if you don't upgrade your phone after 3 years and continue to use it, the $20/mo surcharge drops off your monthly bill. Just as though you had bought the phone outright, because by that point you have bought the phone outright. For nearly two decades now, carriers (except T-Mobile) have been fleecing customers who don't upgrade phones after their contract is up. It was ripe for a FTC investigation.

They're able to call them subsidies now?

[cant_get_a_good_nick]

A while back we were on Verizon, with the implicit subsidy until we paid the phone off. Two years are up, well, we did pay the phone off, and then I asked if we could have a bill reduction because of that. I asked for them to take the subsidy off. The look on the person's face was as if i just peed on them. How dare you say subsidy! We don't have a subsidy!!

For long time, Verizon had this unmarked subsidy in their bill. A lot of people forgot about it, and then that became pure profit to Verizon. It was never marked as "phone paydown" or whatever. Since people never saw it as that they paid for months and months for something that was already paid off.

I applaud whatever is making them more overt. TMobile maybe? TMobile has it very clearly marked in your bill.

Re:They're able to call them subsidies now?

[Anonymous Coward]

Telstra do a similar thing, subsidized phone prices are usually not listed, but if you pick a lower plan and higher priced phone, you may pay somehwre between $6 and $11/month for the phone. This is removed at the end of the contract, but the rest of the subsidy isn't. You have the option to recontract and get a new phone, or a BYO contract (12 months) which usually offers the higher plan for the lower price (ie Medium plan for the cost of the Light plan).
But most people do neither and Telstra rake it in.

Re:They're able to call them subsidies now?

[Sable Drakon]

Sad thing is, even with Verizon's analog to my own T-Mobile plan, Verizon is still the more expensive option. I own my phone outright, I'm not paying TMo a subsidy for the phone, and VZW is still 10$ more expensive at minimum.

Re:They're able to call them subsidies now?

[timrod]

AT&T does something very similar, but even more underhanded. I just had an old iPhone die on me, so I went in search of a new phone. As someone who had very little to no experience with buying smartphones (the iPhone was handed down by a family member) I quickly learned how badly you get screwed buying from any carrier.

I did some research first, and found out that AT&T sells new phones at rates far higher than you would pay on Amazon or anywhere else. Let me give the example of my phone, the HTC One M9. AT&T sells the M9 for $735 without contract, or "subsidized" at $200 to start and then an additional fee on your bill each month for two years.. that adds up to $735. Meanwhile, I got the same phone, unlocked from the manufacturer, at $600 (which is just over what my carrier would charge for a used high-end iPhone 5). I'm sure I could've saved more if I had bought a Nexus phone, but I wanted to make sure AT&T would allow my device (it'd be really, really hard for them to say "We can't accept this phone" when they're selling the same thing in their stores unless I had made a huge mistake and bought a non-GSM model).

I'd like to think I could actually hear the anguish in the voice of the person on the other end of AT&T's support line when I called in to activate my new SIM card.

Re:They're able to call them subsidies now?

[cbhacking]

TMo was the first of the big 4 to go this route, yeah, and the rest of the industry seems to be following them. Good for them, and for all of us.

Tempted to ask if you did, in fact, piss on the Verizon rep. They could have used it, I think.

I had to deal with that company for a while (foolishly bought into a two-year contract, and as a student I didn't have the spare cash to pay an ETF plus this was before any of the carriers were really that good policy-wise) and by the last few months I was counting days remaining. I had to call them every other month or so to get the "bullshit charge" (defined as "how much bullshit do we think can be padded onto your bill before they call to contest the charge") removed, which was an unpleasant process even though I got pretty good at it. Eventually they faced a class-action suit over the practice (which, after legal fees, paid me about 2x the average amount of the bullshit charge for a given month) and might have stopped after that, but I switched to T-Mobile before the suit was resolved. Never looked back, either.

Re:They're able to call them subsidies now?

[jmcharry]

I ran into the same thing. They told me I could have a new phone for "free", but no rate reduction for having paid off my current phone. I told them that was too bad for them and fired them. That was a few years ago, and I have no regrets.

Re:They're able to call them subsidies now?

[luther349]

yea t-mobile and at@t moved to this style so of course the rest are going to.

Re:They're able to call them subsidies now?

[eWarz]

Bad for apple and samsung of course. The problem is that, while CellCos are hoping that they will make more money, it really isn't going to happen. When joe bob finds out that buying 5 iphones will add $150 to his cell phone bill, he'll go for another, much cheaper carrier. Keep in mind that carriers made money off the phones as well. Do you really think apple charges verizon $650 for an iphone? No, verizon got it for around $325 and resold it for $650...It was easier when people could say 'it's going to cost me $350 regardless!" now, Verizon isn't just competing with other CellCos, they are competing with...Every retailer out there in addition to the CellCos. Good luck Verizon! Enjoy that race to the bottom. I'm sure Amazon will gladly undercut you by $200 and I'm sure T-Mobile will love claiming to be $300 cheaper per month.

What I hate is

[rsilvergun]

that my cell phone company has managed to get me about to the old unsubsidized price over time. The trick they used on me was piling on "regulatory compliance" fees that they assume I'm too dumb to know aren't taxes (it's not a tax if you're pocketing the money).

Re:What I hate is

[tepples]

The trick they used on me was piling on "regulatory compliance" fees that they assume I'm too dumb to know aren't taxes (it's not a tax if you're pocketing the money).

Some of these fees are in fact taxes payable to the FCC or other government agencies, such as contributions to the Universal Service Fund. Some are the itemized cost of complying with unfunded mandates by the FCC, such as E911 and local number portability.

Re: What I hate is

[Karlt1]

"unfunded mandates by the FCC, such as E911 and local number portability."

What other business charges separate fees for complying with the law and advertise false prices?

Re: What I hate is

[eWarz]

Grocery stores. pepsi 12 pack cans! 4/10$...(+ tax where applicable...+ deposit where applicable)

Re:I Guess You're Overpaying

[armanox]

I'm currently paying roughly $100/month for the entire bill - two phones (an iPhone 5 and a flip phone), unlimited talk/text, 4GB data. Verizon lowered my bill around the start of the year when they dropped "New every two" and officially made it that you were paying for the cost of your phone as part of the bill, and later upped my data from 2GB to 4 as part of a loyalty bonus.

Still Subsidized?

[Thelasko]

Verizon has been walking away from the subsidized phone model. You've been able to ask for a non-subsidized rate for a while now. The prices are even listed on their website. However, there is still a catch! The monthly installments for a new phone are at 0% interest. That means they are using your monthly service fees to pay the interest on the loan. Paying for the phone in full would be turning down a discount in terms of finance charges. I wonder if this will change when the new plan comes into effect.

Re:Nexus!

[drinkypoo]

Maybe this will make buying a Nexus phone finally make sense.

Not unless they give you socketed, upgradable storage. If you will do anything the least bit unauthorized with your phone, even making application backups, you're better off with a card slot than without one.

Re:Nexus!

[Higaran]

I can't wait for the nexus phones that will come out this year. I have a nexus 5 and i just cracked my screen pretty badly, it still works, but looks like krap. No way am I going to run out and get the 6 if a new one is coming out at the end of September or early October. Nexus phones have primarily been the best bang for your buck when getting a new android.

Re:Just curious

[vandelais]

Coverage (still matters).

Spend $7/month instead of $50

[emil]

It looks like Verizon's cheapest service option for Android is the $20 connection fee, plus $30 for the 1GB service.

Tracfone will give you Android on exactly the same towers for $20 for for a 3-month plan, no connection fee.

The Tracfone subsidiaries (PagePlus, StraightTalk, Net10) will also give you Verizon service at several different price points.

You can bring your 4G Verizon phone and avoid a new hardware purchase. If you bring it to Tracfone, you'll get triple the face value of your refills.

You can also get discounts on your refills at PinCheap.

Extra Profit Fee

[ITRambo]

A $20 monthly connection fee? Sounds like Verizon has a long way to go to match Straight Talk (CDMA where I live uses Verizon) at $45 month for 5-GB of full speed data, before dropping the speed. Verizon is hoping people don't notice the $20 monthly connection fee which is added to the monthly base charge, which makes it still to expensive for me with too little data. Also, $15 per month for each GB of data over the cap is quite excessive. No thanks.

Re:Extra Profit Fee

[DoctorBit]

PagePlus also uses Verizon's network. I've got their $30/month half GB plan and it works great - no extra charges for anything.

Re:Extra Profit Fee

[eWarz]

Straight talk and Page Plus both have their LTE capped at 5 Mbit down, in addition, you don't get Verizon's roaming network (which i've used in the past). Verizon's LTE network is 10 times faster. Now that it matters much, but it's worth noting. You aren't getting Verizon for that price, you are getting $45 worth of verizon at that price.

Data still too expensive

[Anonymous Coward]

It shouldn't cost more than $25 a month, including all fees, taxes, surcharges per device for unlimited/unlimited/unlimited with maximum data rate full time.

Why do I say that? Think for a minute, how much bandwidth is used in those ulimited talk and text plans?

Based on some of the codecs in use, we see a wide range of usage from 21Kbps to 87Kbps, which I've averaged to 43Kbps for my math.
G.711 - 87Kbps
G.729 - 32 Kbps
G.723.1 - 22 Kbps
G.723.1 - 21 Kbps
G.726 – 55 Kbps
G.726 – 47 Kbps
G.728 - 32 Kbps

Taking the average of the 7, 43Kbps, and then multiplying out for a single day's usage, we get 434Megabytes of data usage to transport the voice call.

(43000 * ((60 * 60 * 24)) / 8 = 464400000.00000 or 464,400,000 or 464.4 MBytes per day * 30 = 13,932,000,000 - Just under 14GBytes per month in voice alone.

24 Hours of voice = 434 Megabytes of data per day, 14GBytes of data per month. We can get unlimited voice plans for about 20 bucks a month right? That means that 14GB of data is 20 bucks a month, cheaper if we count say several hundred texts to add more data usage during that month.

So why do they charge 30 bucks for 3 gigabytes of data????? It's because people are too stupid to know any better.

Holy crap.

[HideyoshiJP]

The uncarrier did it. Don't get me wrong, I'm not going to pretend T-Mobile is an angel, but I think they've truly changed the industry.

Re:Holy crap.

[Anonymous Coward]

The CEO did it. AC for the known reason. He specifically said 3 years ago in internal meetings he wanted to get rid of them. The size of the loans they took out to pay for it. Well into 9 figures.

They went from subsidizing 50 dollar phones to 700 dollar phones. The charge on the books is huge. They went from a 1-2 month ROI to basically it taking the full 2 years. What this means is they had very little wiggle room on reducing plan costs to compete. As they had to pay the subsidy anyway.

Re:Holy crap.

[HideyoshiJP]

That's definitely interesting if true. It makes sense as you explain it, at least.

Re:Holy crap.

[schnell]

I'm not going to pretend T-Mobile is an angel, but I think they've truly changed the industry.

I don't know about changing the industry, but other carriers have made moves to match T-Mobile, which has resulted in more consumer-friendly options across the board. So kudos to T-Mo for that. But the whole "Un-Carrier" schtick wasn't done from altruism, it was a strategic play decided on when T-Mobile didn't have many options except to be disruptive.

Flash back four years ago and T-Mobile is recognizing the decreasing distance between its rock and its hard place. It was the fourth largest carrier in the US, in a business where scale is EVERYTHING. (Think of it this way: you need 40,000 towers or so to cover the country whether you have 10 million subscribers or 100 million subscribers, so divide up their support costs per customer and...) T-Mo is owned by Deutsche Telekom, which had enjoyed being in the growing US market (compared to Europe) but basically said at this point, "your network is mediocre but making it genuinely good would cost billions and billions of dollars, which we don't want to spend. We will be trying to sell you as soon as we can. Barring that, figure a way out of this and send us a postcard once in a while on how it's going."

Deutsche did in fact shortly agree to sell T-Mobile to AT&T, which ultimately fell through due to FCC/antitrust objections. T-Mo couldn't compete based on economies of scale, and they couldn't compete based on network; their strategy had always been to have good coverage in urban/suburban areas but skip the more rural areas that you need to have really good reach but are not very cost-efficient. T-Mobile basically had to do something creative or die. Given that choice, to their credit, the opted for the former.

With that being said - and even though they have passed Sprint to become the #3 carrier in the US by customers - the fact that they are offering consumer-friendly deals and adding subscribers doesn't mean they are actually in a position to be profitable in the long run. Hint: there's a reason that T-Mobile was engaged in talks to be acquired by Sprint last year, and then again with DISH Network this year... companies with sound long-term economic prospects don't go around seeking to be bought by larger companies.

Re:Current plan

[Anonymous Coward]

So wait, if they are selling phones at full price now, does that mean they have finally switched to GSM? If not, what kind of idiot would pay full price for a phone that is locked to the carrier?

SDXC exFAT patent

[tepples]

I'm not sure how they can do that efficiently. The SD specification requires that cards bigger than 32 GB use the exFAT file system, which is patented by Microsoft. It is a violation of the spec for a device to require reformatting such a card to something more sensible like UDF. Even if the phone manufacturer can afford to pay the SD and exFAT royalties, patented file systems must run in user space, which in theory makes them slower. Or has this been not a problem in practice?

Re:SDXC exFAT patent

[drinkypoo]

I don't care if they follow the specification, and I'm perfectly happy if they just make the eMMC slot available to me.

Re:SDXC exFAT patent

[thevirtualcat]

http://opensource.samsung.com/...

As far as I can tell, most companies just ignore the "can't be patented, or must have royalty free licensing for everyone" part of the the GPL.

Re:SDXC exFAT patent

[mlts]

The HTC M8 and M9 came with SDxC card slots, and they are quite happy with 128 GB cards.

However, these are their flagship, top dollar phones, so the license for exFAT is probably baked in somewhere for the device cost, or perhaps amortized against their entire lineup. Similar with the patent license for Android's parts that Microsoft holds. As for exFAT, it runs as a native filesystem under Linux, and not through FUSE.

Since the Linux kernel is still GPL v2.0 licensed, having a binary blob as a filesystem is just fine. A lot of companies have their own vendor-specific code sans source on the Linux platform.

Re:Just curious

[pleb1024]

Yes - there are many options, pretty much for every network - but the best ones are mainly the MVNOs

I use an iPhone on AT&T networks - via H20Wireless, paying
5c/min voice
5c/ text
10c / mb

The best summary web site I've found for deciding what carrier / prepaid plan to be on :
http://www.prepaidphonenews.co...

It's updated whenever carriers plans change - so while the URL might make you think it's 4+years out of date - was last modified July 29th 2015.

Sprint Commercial

[freeze128]

Verizon Rep: "We have a 4GB plan for $120 a month...."

David Beckham: "That is not a good deal."

Re:Current plan

[olsmeister]

Yep. I have a Galaxy S3 and unlimited data and pay $68 per month (that includes a discount because I'm employed at a company that is a Verizon customer). I really would love to find a way to get a new phone and keep the unlimited data, but I don't think that's possible. I don't think they'll even let you buy a phone outright anymore and keep your unlimited. The funny thing is I use about 2 GB per month on average, so it's not even a big deal to me - just the principle of the matter.

Includes unlimited minutes and messages

[tepples]

Is there a pay as you go plan in the US that can be used with smartphones and doesn't have any monthly base cost, just per minute and per megabyte accounting?

Ting's pay-as-you-go plan has a lower monthly fee ($6 plus usage). Talk, text, and data are extra.

it sounds like Verizon wants $20 just for allowing a smartphone on their network, or what does that include besides a number that can be called?

The line fee also includes unmetered incoming and outgoing domestic voice and text. Carriers have realized that with things like Skype, Hangouts, and iMessage/FaceTime, they can no longer get away with charging per minute for calls between smartphones.

Re:Just curious

[Falos]

I'm a light user, not a chatty person, so BYOD ala carte was for me. I use ptel, but there's probably lots of choices of groups who lease towers. No activity fee, but ala carte accounts will eventually go inactive, refreshed when balance is loaded. Minimum is $10, triggering 2mo of account uptime. So, $5/mo minimum. My auto reload trips about once a month.

Maybe there's better out there, but what do I care? I'm getting voice+mms+data for ~$10/mo, I'll settle. I optimistically assume their $.10/mb is competitive, since I barely use it.

Re:Current plan

[acoustix]

So wait, if they are selling phones at full price now, does that mean they have finally switched to GSM? If not, what kind of idiot would pay full price for a phone that is locked to the carrier?

You pay full price for the phone regardless if it's over the length of the contract, up front or part of an early termination agreement.

So it's like an expensive on-contract MVNO?

[ewhenn]

So it's like an expensive on-contract MVNO? If that's the case, why even bother? I can already pay full price for my phone, but not be tied to a contract and get better value (more data, etc.) for my money.

Re:Current plan

[clonehappy]

You must be the idiot.

All modern Verizon LTE smartphones (2011+ or so) have been fully compatible with GSM/UMTS networks for years now. And yes, they're completely unlocked and can be used on any carrier worldwide. You are aware that LTE is a GSM-based standard, aren't you? And that Verizon uses SIM cards even for authentication to their CDMA network, right? And that Verizon phones are some of the MOST compatible phones on the market since they can be used on any GSM carrier for at least HSPA level connectivity AND Verizon, too? And that a modern Verizon LTE smartphone s fully compatible with the majority of T-Mobile's LTE service and can work fully on their network in most areas?

And even that you were paying "full price" for the phone even way back when Verizon was strictly an IS-95 CDMA network. It was baked into the cost of the service and was enforced through the 2-year contract. You did know that as well, didn't you?

Re:Current plan

[allquixotic]

You can buy a phone outright from Amazon that's licensed for the Verizon bands (or buy one used on eBay or Amazon or elsewhere), stick your activated SIM card into it, and off you go. If your SIM card is too large or too small for the new phone, there are cutters and adapters to move in both the "larger" direction and the "smaller" direction.

If you're willing to pay, you can definitely get either a new, like-new or used phone of any make or model that runs on Verizon's network, and get service, without ever having to directly do business with Verizon Wireless or any of their associates in order to make the change.

By the way, Best Buy will let you buy a full retail phone too, last I checked.

Re:I Guess You're Overpaying

[tompaulco]

I'm currently paying roughly $100/month for the entire bill - two phones (an iPhone 5 and a flip phone), unlimited talk/text, 4GB data. Verizon lowered my bill around the start of the year when they dropped "New every two" and officially made it that you were paying for the cost of your phone as part of the bill, and later upped my data from 2GB to 4 as part of a loyalty bonus.

I'm paying $168 for two smart phones and a dumb phone. The base plan is $40, each of the smartphones is $40, although Verizon advertises that it is only $15, and the dump phone is $30, even though Verizon advertises that it is $10.

Re:Current plan

[armanox]

Last time I checked you simply had to not buy the phone from Verizon and add it to your account manually (online)

Re:Current plan

[allquixotic]

But how unlimited is unlimited? Don't you get throttled down to 2G speeds if you use more than a handful of gigs of data?

I hate mobile telecoms

[bobmajdakjr]

$80 for 12GB is retarded. I can't imagine what life would be like if our landlines had that kind of price limitation.

This will probably help the discount carriers

[leonbev]

When someone has to pay $750 for their next iPhone up front, I doubt that they will still be willing to $80 for an "unlimited" plan with a 3 GB data cap when they can get the same plan from someone like Cricket Wireless or Straight Talk for $45 a month.

Re:This will probably help the discount carriers

[leonbev]

Yes, I've had the misfortune of having to configure the MMS services on my Straight Talk T-Mobile SIM card. What really sucked is that they STILL didn't work after I had them configured, because their MMS server was down that weekend. After publicly arguing with them on Twitter for a few days, it "magically" started working on it's own.

After a few more MMS outages like that, I switched to an AT&T compatible SIM card. That worked out of the package automatically. Go figure.

Re:Current plan

[clonehappy]

Every Verizon SMARTPHONE (did you even read the TITLE of the post?) being sold today has a SIM slot.

And no one ever said buying outright would historically (it will now) lead to a lower monthly bill. I said that you were always paying full price for the phone whether you were stupid enough to do it outright or take the subsidy which is what anyone with half a brain always did.

Re: Current plan

[Karlt1]

There is so much of this post that's not true, it's hard to know where to start. There are some Verizon CDMA/LTE phones that can only fall back to CDMA and others that don't support the LTE or HSPA bands of the other carriers.

Cell carriers not the only company w/ hidden fees

[tepples]

Hotels, airlines, car dealers, colleges, banks, hospitals, all masters of the hidden fee. (Source)

Re:Just curious "Ting"

[vettemph]

Ting comes close
1) 6 dollars a month per activated SIM
2) only pay for what you use (more like pay for what category you fit this month)
3) BYO phone (buy a BLU, or a nexus, or anything really.) T-mobile compatible GSM and some CDMA.
4) No extra charge for tethering your tablet. it just uses your data.

Check out their rates. I am a happy customer.
I was paying AT&T $160 for 2 phones, now I pay Ting $45 to $60 for 3 phones.

Re:Current plan

[KGIII]

I know you can bring in a phone and have that activated and use that with unlimited Verizon. My sibling does this. I've bought her a few phone gifts over the years because my gifts are almost always compute devices. She, for reasons known only to her and a gargoyle, does all of her computing on a phone. All of it... No, she does not tether her phone and use a computer. She does all of her computing on the phone up to and including writing books. I have given her computers. It did not help. She has been using phones for many years now. She used to be a normal computer user. She lives off the grid (entirely) so I guess it makes some sense but not a whole lot seeing as I know she has plenty of available power.

That's so expensive - in Israel it costs 10$

[Hemi Rodner]

In Israel, 4GB/month + unlimited calls costs 10.27$ (39 ILS, at 012mobile.co.il).

MVNOs did it

[kervin]

T-mobile was the first to respond most likely because they are the smallest. Typically, smaller competitors react to market changes faster than the more entrenched. But the change to post-paid has been coming for years, as all providers were losing lots of customers to MVNOs. It has been obvious ( looking at the market in the rest of the world ) that this is where the industry was going.

Re:We need to thank AT&T

[cant_get_a_good_nick]

Deutsche did in fact shortly agree to sell T-Mobile to AT&T [wikipedia.org], which ultimately fell through due to FCC/antitrust objections.

When this deal fell through, AT&T had to give TMobile a nice parting gift.. of 3 Billion dollars and some roaming agreements. This is when TMobile started to become a force. Between having cash for towers and customer acquisition, and better effecgive networking, AT&T was the one that helped TMobile move forward.

Re:Putting the screws to Apple

[cant_get_a_good_nick]

Verizon put the screws to Apple years ago. The Droid line was a reaction to the fact that AT&T had at that time an iPhone exclusivity agreement. Verizon didn't want to get left out in the cold with smartphones, and was one of the big pushers of Android early. This is nothing compared to that.

People go to Verizon because they have the best network. They know Verizon will screw them on price somehow, but they want the Verizon network. If it was a price sensitivity thing, they'd go AT&T, TMobile, Sprint, or any of a dozen MVNOs.

My wife and I have an iPhone each, and neither went through Verizon subsidies. My phone was paid off on purchase, and has always been TMobile. Her phone was paid off on purchase, and was initially Verizon because we felt we needed separate networks (I dabble in being a sysadmin, i liked the redundancy) until the TMobile price delta, and the ability to roam for free internationally, was too much better than what Verizon has to offer.

Can't believe the price difference

[Vrekais]

$20 per month for phone + $60 for 6GB I tether my phone a lot and on a month where I'm watching a show during my commute to work I'll usually use about 5GB. If I'm holiday I'll use up even more watching films in the evening.

So in the USA I'd have to pay $80 a month (before even considering the extra fee for tethering) which is £51! With-out a phone too!
I pay £15 a month for 100 Mins (which I never use), 5000 texts (which I never use) and unlimited data.

My home internet doesn't even cost £50, it's £26 for 60 Mbit/s fibre with no data caps. (I think there's some throttling if I download so many GB in a short period of time). How do they manage to charge so much more for less service? Is it just the lack of competition in many areas?

Re:I Guess You're Overpaying

[N!k0N]

That's with Verizon EDGE, and a sufficiently large data plan (IIRC it's 6 or 8 GB / month). They'll then take $25 off the monthly handset charge.

Re:Current plan

[crashumbc]

As of last July, you could still upgrade your phone (paying full price) and keep your data plan. I even bought my LG G3 at a VZW store because no one else had it yet. ( I did have to listen to them try and talk me into switching. I finally told the guy "I'm rich I can afford to pay full price :P )

If your current phone uses a micro sim you can just buy your phone online and swap the sim. That's what I plan to do for the next upgrade.

(unlimited for life :P )

Re:Current plan

[crashumbc]

Umm I think you need to visit a VZW store, EVERY smartphone they've built for years as a SIM slot. And yes they use the SIM to auto authenticate the CDMA portion.

You DO know by the end of 2016 VZW will be producing LTE only phones? right? hello?

(can't believe I responded to a troll AC)