Verizon Eliminates Year-Long Contracts, Starts Month-To-Month Cell Plans

Verizon is jumping on the month-to-month bandwagon, following T-Mobile and AT&T’s model of eliminating annoying year, or multi-year contracts.

Earlier this year, John Stratton at Verizon hinted about the upcoming switch away from long-term contracts and into a pay-as-you-go model. Stratton told investors that cell phones without contracts were what customers wanted, and that short-term cell phone plans were becoming increasingly popular.

So what are the benefits of Verizon’s new month-to-month plan? Well, for one, you are not bound to Verizon for a year to two years on end. If you decide that Verizon’s service isn’t working for you, or if you suddenly come across a more affordable, better option with another company, you can jump ship, (though you might have an issue taking your number with you, depending on the company). The new monthly options from Verizon are relatively affordable. For 1GB of data, it costs $30. For 3GB in a month, the cost is $45. 6GB is $60 and 12GB is $80. All of that data can be shared between as many as 10 devices, but you’re going to have to pay a monthly fee for each device connected to your Verizon plan. Smartphones cost $20 per month to be connected to the plan. Tablets and Jetpack mobile hotspots cost 10 bucks per month for a connection, and other devices like smart watches are $5.

What’s the downside of the new Verizon month-to-month billing plan? Usually, when a customer signs up for a year or two-year plan with a phone company, they can get a greatly reduced smartphone as part of their package. Hence, instead of paying Apple $400 for a new iPhone, you might get one for $200 or even less.

That option is available with the month-to-month Verizon plan. However, Verizon will sell you a sparkling new smartphone on a payment plan that lasts two years. This seems to be a good idea on Verizon’s part, as they still allow new customers to opt-in to a new phone purchasing contract of sorts (even if you are paying full price), but you’re still not tied to Verizon for your overall carrier plan.

Verizon has indicated that current customers that are in the midst of previous annual contracts can remain in their current contract, or they can opt-out immediately for the month-to-month plan.

What do you think? Are month-to-month plans the way of the future, or do you find the discounted smartphones that come with annual and multi-year contracts a good deal that you don’t want to see go away? What do you think of the new switch by Verizon?

[Photo by Spencer Platt/Getty Images]