Verizon Wireless is offering discounts of at least $10 a month for subscribers who buy their phones through the company's installment plan.
Before, customers who opted for Verizon's Edge plan had essentially been paying for their phones twice — through the installments and again as part of monthly service bills that include the costs of phone subsidies that Edge customers weren't taking advantage of.
The discounts announced Thursday do not fully cover the installments on high-end phones. Verizon charges about $27 a month for an iPhone 5S, for instance. By participating in Edge, customers on data plans of up to 8 gigabytes get $10 a month off, while those on higher plans get $20.
That said, Edge doesn't charge a $200 up-front fee for the typical high-end phone, as subsidized plans do. That's a savings of more than $8 a month over two years, meaning customers who get the $20 discount are slightly ahead overall.
AT&T Inc. has already offered discounts for people on its Next installment plan, starting at $15 a month. Those with 10 gigabytes or more of data get $25 a month off. Meanwhile, T-Mobile US Inc. did away with subsidies entirely and reduced all service charges accordingly last March.
In both cases, customers also save if they buy their own device elsewhere and don't participate in the carrier's installment program. Verizon's discounts apply only to its installment customers. As the No. 1 wireless provider, it doesn't face the same competitive pressures that other wireless carriers do.
Verizon spokeswoman Debra Lewis said that while Verizon's discounts apply only to Edge customers, other plan changes will benefit subsidized customers as well.
Verizon is increasing the data allotment for some customers, while creating two lower-priced plans with less data. These buckets of data can be shared among several devices. Under these shared plans, customers pay a monthly base fee depending on the amount of data needed. A monthly fee is then added for each device sharing that data.
Under the new plans, Verizon is also offering free texting with phones abroad while the customer is in the U.S., but it isn't matching T-Mobile's offer of free text and data roaming while traveling to other countries.
The discounts and pricing changes will be automatic for those already on one of Verizon's shared plans. Those currently on 500 megabyte, 1 gigabyte or 2 gigabyte plans will see their data allotments increase to 1 GB, 2 GB or 3 GB. They will have to contact Verizon if they want to keep their current allotment and save an additional $10 a month instead.