The nation’s largest wireless carrier stopped offering two-year contracts to new customers earlier this month and has been boasting of “simple” 4-tier data plans in its TV commercials in recent days.
Verizon’s new no-contract plans come in just four types: small (1 GB of data per month), medium (3 GB), large (6 GB) and extra-large (12 GB). But that’s not a simple calculation for most smartphone users who may not understand their typical usage amounts. Even worse, if members of your family become data hogs, you may not have a big enough option to cover usage.
It all begs the question: Why doesn’t Verizon find a way of offering unlimited, 4G plans like T-Mobile? T-Mobile may be the No. 4 wireless carrier — but it started offering no-contract plans back in March 2013, along with unlimited data. In July of 2011, Verizon announced it would no longer offer its wireless users unlimited data plans.
Verizon’s entry into the no-contract arena was somewhat clumsy. It had to clarify last week that if you are currently under contract, you can renew your two-year deal with Verizon when you upgrade your phone.
But as CNNMoney reminds consumers, “you shouldn’t do that.”
“Every single one of Verizon’s new contract-free plans will save you money over the course of two years, when compared to Verizon’s old two-year contract plans,” CNNMoney reports.
You’ll save at least $3 a month by going contract-free. But smartphone users can save up to $40 each month, depending on how much data you use.
The new Verizon plans have no down payments or activation fees. You can either pay for the entire price of the phone up front, or you can pay the phone off every month over the course of two years — that’s two other features introduced by T-Mobile more than two years ago.
“Our sole intention of this new pricing is to make things more simple for our customers — so you know exactly what you’re paying for and how you’re saving,” said Verizon’s PR Director Chuck Hamby.
Verizon ended unlimited data plans mostly because of the minority of users who are data hogs, causing problems at the local level for the largest wireless providers. Extreme data users can cause some network congestion, and can degrade the level of service for other users in the same area. It would be much costlier to upgrade all of these local components in the network to handle extreme data users, without affecting ordinary users.
The average smartphone user checks e-mail, posts on Facebook, and watches an occasional YouTube video, and ends up using about 1-2 GB of data per month. However, extreme users can consume 10-100 times that amount of data.
Current Verizon customers under contract will have to pay an additional $20 a month when switching to a new “Verizon Plan” deal — until their term is up, so they can pay off the cost of their current phone. Once they’re eligible for a new phone, Verizon will automatically drop the “per-line access charge” from $40 to $20.