A simple guide to buying cellphone service in 2015

A simple guide to buying cellphone service in 2015

When I say “AT&T” and “Verizon,” what comes to mind?

Most of us might say a cellphone company. But the truth is, companies like T-Mobile and Sprint are really in business to sell a wireless service, like the ability to make voice calls and use mobile data. That’s what they have always been. And it’s becoming more apparent than ever, with moves by these companies to stop supporting two-year contracts and subsidizing the cost of a phone.

T-Mobile was the first to take that step. Since then, so has AT&T. Although it still offers two-year contracts, you have to work hard to get one; the company has been aggressively promoting an alternative pricing model, AT&T Next. Sprint now lets you lease its phones for a monthly charge, rather than buying. And last week, Verizon also got on board with the change that is sweeping the industry.

Now, new customers will pay for their phones in full upfront or in monthly installments, but separate from their cellular service. (You’re also being encouraged to bring your own phone instead of buying a new one, which will eliminate those device payments altogether.) That’s a big change from the previous model, in which customers often paid a discounted upfront price for the phone (say, $200 for an iPhone) and then got a single monthly bill that covered the remaining cost of the phone and the service, together.

The effect of the new plans on consumers won’t fully be felt for some time. It will take a while for some people to run out their old contracts and be faced with the new options hitting the market. But it’s safe to say that we are at the crest of a sea change in the wireless industry — one that will uncover just how mistaken we all were about how the business works.

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