NEW YORK – Verizon, the nation's largest wireless provider, will stop offering phones at discounted prices when customers sign two-year service contracts.
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The move was made in the name of simplification, but it could result in some customers paying more.
All wireless carriers have been trying to wean customers off subsidies, in which a $649 iPhone 6 goes for $200 with a two-year contract. Instead, carriers have been encouraging people to buy phones outright by paying monthly installments. A few carriers, namely Sprint, also offer leasing options for a lower monthly fee, but the customer doesn't get to keep and resell the phone without additional payments. Verizon is the second national carrier, after T-Mobile, to end subsidies entirely for new customers.
Existing customers will be able to keep current plans. Verizon says there will be restrictions, but it didn't elaborate. For instance, it wasn't immediately clear whether customers keeping the current plan would still qualify for subsidized phones.
Under the new plans, which take effect Aug. 13, prices for voice, text and data services will drop by roughly $20 per month compared with subsidized plans. But customers will no longer get the subsidies on the phone, valued at about $19 for an iPhone 6.
Verizon is also streamlining its data options to four main options, ranging from "small" at 1 gigabyte to "x-large" at 12 gigabytes, all sharable under family plans. Verizon currently has 15 options ranging from 0.5 gigabyte to 100 gigabytes. Two gigabytes is plenty for most single-line customers, though a few hours of streaming video could eat that up.