Verizon’s New Prepaid Plans: No Great Savings Here

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Verizon Wireless on Thursday unveiled new prepaid data plans for some multimedia and 3G smart phones, including several BlackBerry and Droid handsets. The offerings include an unlimited data package for $30 per month; and a $10 plan with a stingy 25MB monthly cap (with a 20-cents-per-megabyte overage fee).

Prepaid wireless plans are handy for customers with malodorous credit, or for those who simply don't want to be tied down to a long-term contract. Carriers charge prepaid customers more for cell phones. For instance, a Verizon Wireless customer who signs a 2-year deal pays $200 for a Droid X, whereas the prepaid user pays nearly twice as much ($395).

While carriers subsidize phones for their contract customers, they recover the discount over the life of the plan. But if that's the case, shouldn't prepaid customers catch a break on monthly charges?

I configured the least expensive monthly plan for Verizon customers who buy a Droid X and who want unlimited data. (If you're getting a powerful Droid X--more a wireless mobile computer than a phone--Verizon's $10 per month 25MB data plan is a joke.) As the chart below indicates, not only do prepaid users pay nearly $200 more for their phone, but they also pay $5 more per month in fees.

Verizon's Droid X plans: Contract vs. Prepaid

2-Year Contract


Droid X price



Unlimited data



450 voice minutes



Text messages

20 cents per message sent/received (25 cents for video and picture messages)

20 cents per message sent/received (25 cents for video and picture messages)

Early termination fee

$350 after 30-day grace period, minus $10 for each contract month completed


Monthly total (excluding taxes and additional usage fees)



Again, if the phone subsidy is built into the cost of the two-year contract, where's the service discount for no-contract customers who pay twice the subsidized rate for their phones? Not only is there no discount here, but prepaid users actually pay a little more per month.

The moral here? You'll pay a penalty for prepaid.

Contact Jeff Bertolucci via Twitter (@jbertolucci) or at

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