Verizon’s New 24-Month Subsidy and the Handcuffs of Strong Network Performance

Verizon Subsidy Contract

I am due for a new phone upgrade on Verizon in June. I keep track of these things awfully closely, because 20 months is a long time for me to stick with one phone, and I am usually chomping at the bit for a new one by the time my new subsidy is up! So I was, to say the least, absolutely dismayed to see the news that Verizon is moving to a 24-month cycle between subsidies. I sent a lamenting email to my fellow editors, and this set off a discussion about cell phones, subsidy strategies, and why we end up stuck on certain carriers.




Carly: Not cool, Verizon, not cool at all…check out what The Verge is reporting. A full 24 months between subsidized phones!



Judie: Darn… I was actually considering switching to Verizon after they basically saved us last week when my MiFi worked better for data than AT&T ever has! Bah!!



Michael: Fortunately my 20 months is up in October so I get by THIS time … but the rest of my crew will be a full two years.

I wonder if they can actually DO this? Or does this signal one of those changes that allows you out of your contract because they are changing terms … ?


judieJudie: Good question!



CarlyCarly: I think they can do this. I think after everyone caught on to the contract loopholes they started adding in language about how they can change certain terms and conditions and you agree to it when you sign the contract.

I am really pissed. We pay a ton of money to them every month, and it seems like they are finding new ways to squeeze profits at the margins. But this could backfire since they are effectively letting you out of contract at the same time as your subsidy…which is bound to cause higher attrition.

At the same time, as of now we have no landline and we need reliable cell phones. T-Mobile is a nice company with spotty reception, AT&T has poor sound quality around here and they cost as much as Verizon…and I just don’t know if Sprint will be in business in 2 years.

Of course my biggest dilemma is this summer. I am due for my last 20-month upgrade in June. If there’s no sign of a 5S/6 on the horizon, I need to seriously evaluate whether to wait or just commit to a 5 for two whole years…I am not good at committing to phones for that long!

MichaelMichael: What I decided this year is that the difference from $199 to $659 was not really so much … especially since I got to keep my unlimited data plan. Going full retail is something to consider.



CarlyCarly: Very true. Something to consider for next round. This round I plan on getting the subsidy, but with falling component prices buying full retail should be cheaper in the future.



judieJudie: It is always worth considering the full price, when it means that there’s no new contract and you can essentially come and go as you please.



CarlyCarly: The problem is where to go if I did that…there really aren’t many other options, and switching to sprint or someone else wouldn’t bring the phone over.

Sprint would, however, sell us an iPhone 5 for $99 and a family plan for $114 a month with corporate discount. Just not sure about signal and quality. Plus we’d pay to break the VZ contract.

Once you’re in it is mighty hard to get out.

MichaelMichael: For all of the talk about network expansions, it still seems that most areas outside of ~5 big cities are much better served by a single carrier. In our area Verizon is completely dominant, and although AT&T has made strides it is still weak – the woman I was training for my old project had AT&T and was constantly getting dropped from conference calls and so on. T-Mo / Sprint / etc simply don’t exist here.

So while ‘come and go as you please’ sounds good, I think it is an option for fewer people than the aggressive marketing would suggest.

CarlyCarly: And if that’s the case, and there’s no break to buying off subsidy like T-Mobile offers, there’s no point in NOT snagging the subsidy when it’s available and paying full price when the urge to switch phones hits.



judieJudie: I think I am used to (and spoiled by) the come and go because I am with AT&T. Those phones can usually be unlocked and used on any network other than CDMA.






MichaelMichael: The only reason NOT to take the subsidy now is to hang on to my unlimited plan for as long as possible.

CarlyCarly: We gave up unlimited data for a significant drop in our monthly costs…now we’re facing giving up shorter subsidy windows. At some point it may be too much to take, and force us off Verizon. But I just looked at coverage maps, and T-Mobile and Sprint don’t have the same consistent coverage that Verizon does. And I’ve had AT&T-since I like sounding marginally clear on phone calls, they’re not even close to an option for me. Unfortunately, even with this latest move, I won’t be escaping Big Red so quickly.


What’s your take on this latest decision? Let us now in the comments!

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4 replies

  1. As I said, we are more or less locked into Verizon here, so the question is how do we balance things to get the best monthly price. I am still on the unlimited data plan, which has turned out well when I travel and have crappy WiFi at some of the hotels, so I can do FaceTime over LTE … but I know it isn’t sustainable.

  2. Ugh, the same here. I can’t really be on anything but Verizon if I actually want coverage. I’d love it if Verizon had plans that adjusted the price down if you go month to month, but the problem with month to month is that the contract cost is the same as if you were paying a subsidy. I’ll probably just continue resigning a contract and just purchase a new phone at retail price if I really need to get a new one within the 24 months.

    • Yup. Unfortunately the math just doesn’t work in anyone’s favor to skip the subsidy and go off-contract. You’re paying for the subsidy in the price, might as well use it. —
      Sent from my thumbs.

      • It works in your favor only if you have or want the freedom to switch to another carrier whenever you choose, though. That is apparently the premium that Verizon (and the other carriers) makes you pay for the freedom to drop them when you want.