Verizon drops data pricing but won’t acknowledge the elephant in the room: subsidies

Verizon Wireless(s vz)(s vod) has pulled the curtain back on the new pricing plans it hinted at on Wednesday, and here’s the rub: Verizon is dropping prices for customers on its Edge upgrade program, and lowering prices for its shared data plans. But unless you’re on Edge, it is not eliminating device subsidy costs from its plans for customers who have finished their contracts or paid the full cost of their devices.
Like all carriers tweaking pricing, Verizon claims it’s simplifying its pricing plans, but in reality mobile plans are becoming more complicated than tax returns. If you’re a regular contract Verizon customer on a shared data plan, though, these plans will either save you money or give you a lot more data to play with. As the chart below shows (which shows the prices for a single smartphone on these plans), the $50 data tier now gets you 2 GBs, not one 1 GB, and at $60 your data allotment increases from 2 to 3 GBs.
Verizon More Everything plans
Verizon’s new More Everything plans will basically replace its old Share Everything pricing structure, so these rates will automatically be applied to all customers going forward. Verizon Wireless CMO Ken Dixon said that Verizon will automatically move customers into the new higher data tiers at the price points they are currently paying, but customers can contact customer service to restore their original data plans and pay less each month.
As you’ll notice from the chart though, these new prices really only affect customers with smaller data buckets. If you’ve got a bunch of devices sharing 4 or more gigabytes each month, your rates remain unchanged. But Verizon is adding other substantial perks to its plans: All plans will now come with unlimited international texting, and every line will get a 25 GBs of cloud storage (up from 5 GBs).
More Everything Data Buckets
The other change big change is what would at first glance appear to be a discount on its upgrade program Edge. All customers participating the program will get $10 off their bill per device signed up for Edge. But as I’ve said in the past, Edge actually double charges you as customers pay both a monthly device installment cost as well as device subsidy fees hidden in their phone bills. A $10 discount might seem like a deal, but given that device subsidy fee is usually around $15 to $20 in your monthly, Verizon is still taking advantage of its customers in the upgrade plan.
The industry is gradually moving away from this model. T-Mobile(s tmus) was the first when in 2012 it separated device costs and mobile plans entirely, allowing customers to decide how they paid for their hardware and how they paid for their service independently. AT&T(s t) followed suit last year with its Mobile Value Share plans, charging $25, instead of $40, a month for phones that customers buy up front, bring to the network or are paid off through contract.
Verizon is tacitly acknowledging those moves with the $10 price cut to Edge, but its price drop is not only much smaller, it doesn’t apply to any customer on its regular plans with a fully paid-off device. Essentially this new pricing structure continues to charge customers for phones they already own.