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Verizon ditches annual cell phone contracts


Verizon Wireless
SAN FRANCISCO, CA — Verizon is ditching annual contracts. The No. 3 mobile carrier is switching to month-to-month plans starting Thursday.
Current Verizon customers with annual contracts can keep their plans or switch over to one of four new options.
Verizon’s new monthly options are $30 a month for 1GB of data; $45 for 3G; $60 for 6GB; $80 a month for 12G.
The data can be shared between as many as 10 devices, but customers must pay a flat monthly fee for each mobile device connected to the plan. A smartphone is $20 a month, tablets and Jetpack mobile hotspots are $10, and connected devices like smart watches are $5.
One allure of annual contracts was that customers could buy subsidized phones, paying $200 for a new iPhone instead of full cost. Now if they can’t afford to pay for a new phone, customers can use the carrier’s payment plan to pay off a new device in monthly installments over two years.
U.S. carriers have been slowly moving away from the annual contract model.
T-Mobile was the first major carrier to jettison annual contracts in 2013. AT&T announced it was phasing out its 2-year contracts in June.
At at investor conference earlier this year, Verizon’s John Stratton hinted at the move, saying contract-less phones were increasingly popular with customers.
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