Verizon dropped the bad, bullshit news yesterday: It's killing all grandfathered unlimited data plans next year. Thanks to a statement from Verizon to the NY Times, we know exactly how it plans to do so. The answer? You can keep the plans, but it makes absolutely no financial sense to do so.
Here's the statement to the Times in full:
- Customers will not be automatically moved to new shared data plans. If a 3G or 4G smartphone customer is on an unlimited plan now and they do not want to change their plan, they will not have to do so.
- When we introduce our new shared data plans, Unlimited Data will no longer be available to customers when purchasing handsets at discounted pricing.
- Customers who purchase phones at full retail price and are on an unlimited smartphone data plan will be able to keep that plan.
- The same pricing and policies will be applied to all 3G and 4GLTE smartphones.
Basically, you can keep your grandfathered plan, but you're going to be paying full price for all your phones from now on. Which, you know, is totally unsensible for the average consumer.
Take the iPhone. A 16GB iPhone 4S costs $200 with a carrier plan. The same 16GB model costs $650 without a contract. That's the difference you'd be paying for the right to keep the grandfathered plan, every time you upgrade your phone. That $450 price gap is the same for all other iPhones, and also the same as the Droid Razr Maxx, which retails at $650 as well, and is available for $200 from Verizon.
Over the life of a two-year contract, that's an extra $18.75 a month, taking your "expanded data" package—which you are still staying faithful to even though the subsidy is meant to retain customers—to $48.75. That's the equivalent, roughly, of a $50 5GB/month plan. So you can still eek out some value under the new rules if you use more than 5GB of data per month. The bad news, though? Fewer than one percent of unlimited data plan holders actually do that.
For everyone else, it destroys all value, and is counterintuitive, considering it's still screwing over the customers who don't abuse their unlimited plans, but still want what they originally signed up for—on principle, or for future-proofing, or for whatever else. The only people who survive Verizon's buzzsaw are the ones who are causing the problem in the first place.
So for all practical intent, Verizon's grandfathered plans are dead to you—keeping them will be a negative value. That is, unless you're a data slob who uses a ton of bandwidth and doesn't mind paying $650+ for a phone every two years. [NY Times]