Verizon, which shocked the wireless industry by finally offering an unlimited data plan on Monday, added another enticement for customers defecting from another carrier: free phones.
After announcing the new unlimited data plan, which starts at $80 for one line, Verizon (VZ) on Monday said customers who switched from a competitor and traded in a recent smartphone could get one of a host of new phones for free, including an Apple iPhone 7 or 7 Plus, a Samsung Galaxy S7 or S7 Edge or a Google Pixel. Customers trading in an older smartphone could get one of the new phones for $5 a month for two years, or a total of $120.
The moves comes as Verizon faces fierce competition in wireless from smaller competitors T-Mobile (TMUS) and Sprint (S). The two challengers introduced less expensive unlimited data plans last summer, attracting millions of new subscribers. Both carriers also targeted Verizon in Super Bowl ad campaigns and moved to cut prices even further.
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Verizon’s free with trade-in phone offers also require that a customer stay with the carrier for two years. If a customer leaves early, they must pay a prorated portion of the cost of the phone. The offer is much the same as the deals Verizon and its competitors offered at various points during the holiday shopping season last year.
The move could give a boost phone manufacturers like Apple (AAPL) and Samsung at a time of year that is historically a slow selling season. Verizon posted the complete list of available free phones and eligible trade-in phones on its website.
Verizon’s new unlimited plan starts at $80 for one line going up to $180 for four lines. That’s more expensive than T-Mobile and Sprint, without even taking into account some recent price-cutting promotions by the two smaller carriers. Verizon (VZ) doesn’t automatically degrade the quality of streaming video as its competitors do, however.
Sprint’s unlimited plan starts at $60 per line and goes up to $150 for four lines. The carrier started a limited promotion this week, offering five lines for only $90 per month for the first 12 months. T-Mobile’s unlimited plan starts at $70 and goes up to $160 for four lines. Last month, T-Mobile stopped adding surcharges and taxes as additional fees, effectively cutting its unlimited price by another 10% or more.
AT&T (T) offers an unlimited plan starting at $100 for the first line, only to customers who subscribe to its DirecTV satellite service. Some 8 million people signed up for the plan through the end of 2016, AT&T said last month.