Verizon Wireless is about to shake up the wireless industry by shifting from subsidized phones and contracts to an up-front purchasing model.
Verizon Wireless has announced that it plans on changing the way customers pay for wireless service for good. According to a report from CNET, the telecom company revealed on Friday it will introduce a new collection of data plans that allow customers to purchase their smartphone in installments or altogether instead of signing a contract.
The new data plans will be made available on August 13, and signal a radical shift from Verizon’s typical strategy of smartphone subsidies and contracts. Consumers have shown that they are more willing to pay for their devices up front in return for lower service charges, and wireless companies are beginning to take notice. T-Mobile made the move to drop contracts two years ago.
Under the new scheme, there will be no family plans or single-line options. Verizon will sell four options with different levels of data, but all plans come standard with unlimited voice and texting. Data plans will range from 1 gigabyte of data for $30 each month to 12 gigabytes for $80 each month.
Without contracts, it’s easier for consumers to switch between plans each month. Verizon thinks it’s likely that loyal customers would upgrade to a plan with more data. The telecom giant hopes the move will make things easier for customers, but many have cast doubts about the switch.
Analysts find it bizarre that Verizon’s plans would level off at 12 GB. This could discourage high-data users from using Verizon’s services. Users needing smaller amounts of data will likely see a bump in their rates as well. Verizon has acknowledged that this is the first time such a payment scheme has been tested, and it will keep a close eye on the market to adjust prices to consumers’ needs.