UPDATE: Verizon Wireless Offers Plans Without Contracts
Published on: 22nd September 2008
(Updates with comment from AT&T in the sixth and seventh paragraphs.)
NEW YORK -(Dow Jones)- Verizon Wireless on Monday began offering its service without contracts as it continues its push to make its network more open.
The carrier - jointly owned by Verizon Communications and Vodafone Group - will allow customers who pay the full price for their cellphone or bring in their own compatible device to sign up for a monthly plan that they can get out of at any time. Customer must pay an activation fee, but there are no early termination fees for canceling the service.
Verizon Wireless, once the considered the most guarded and controlling of the U.S. wireless carriers, has changed its tune about opening itself up. In the last few months, it has vowed to make its network available to any device that meets basic requirements, and over the past few years made its early termination fee more flexible.
The new month-to-month option means a person can change service or upgrade their phone at any time, but there are trade-offs. Carriers provide subsidies for the phone in exchange for the one or two-year commitments, so a contract-less phone is much more expensive. For example, a Blackberry Curve from Verizon Wireless costs $100 with a contract, but $430 by itself. The contract option still remains for users who don't want to pay too much for their handsets.
Verizon Wireless was one of several major carriers that got in legal hot water over its former early termination fee practices. In July, the carrier agreed to settle all of its outstanding lawsuits for $21 million.
AT&T Inc. (T), meanwhile, said it also offers a month-to-month option for customers who pay more for their phone, although it isn't available for people who want to use the Apple iPhone. Customers can bring in their own devices and get an SIM card from AT&T that requires no contract.
"What Verizon is doing is new for them, but it isn't new," said Mark Siegel, a spokesman for AT&T.
The number of phones available on Verizon Wireless's network is relatively limited. The carrier runs on a technology called CDMA, which is popular in the U.S., but is only used in a few countries around the world. The other major carrier using the same technology is Sprint Nextel.
Verizon Wireless already offers a prepaid service called INpulse. But the plan has costly daily access and per-minute fees that could add up for volume phone users. Fewer phones are available.
The offer is available to consumers and corporate employees.
-By Roger Cheng, Dow Jones Newswires; 201-938-2020; firstname.lastname@example.org
(END) Dow Jones Newswires
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