Verizon Becomes Last Big Four Carrier to Drop Service Contracts
NEWS ANALYSIS: Standard two-year contracts that bundle the cost of the phone with service are now out at Verizon Wireless, which was the last holdout among the big four mobile carriers.
Two years after the then-smallest national wireless carrier in the United States announced that it was doing away with contracts, the largest, Verizon Wireless, has now followed suit, bringing T-Mobile's "Un-Carrier" approach to the major carriers in the industry. Verizon made the announcement as part of a move to change its data plans, which are now described as small, medium, large and extra-large. The plans range from 1GB of shareable data to 12GB. Overages are 15 dollars per gigabyte. Verizon does not quote an unlimited plan. Between T-Mobile's initial move to no-contract plans and Verizon's announcement, the other two national carriers, Sprint and AT&T have also started offering similar plans. AT&T still offers plans with two-year contracts, but most of its plans are also contract-free. Sprint has similarly dropped contracts as it struggles to compete with T-Mobile, which recently supplanted Sprint as the No. 3 mobile service provider. "These new, simplified plans are designed to meet the needs of consumers and small businesses with 10 lines and less," said Melanie Ortel, Verizon Wireless spokesperson. Larger businesses normally have plans and rates that are negotiated separately from consumer and small business plans.
The new plans will go into effect August 13. New Verizon customers will get a no-contract plan automatically. Existing customers may be able to switch to the new no-contract plans, depending on the details of their existing plan. Existing customers will also be able to keep their contracts.