In either AT&T or Verizon's case, they're not making their rate plans more affordable. And those rate plans already have built into them a subsidy that you pay the company for your phone. They don't tell you what that subsidy is. And when reporters ask, they won't answer. But they admit there's a subsidy there in their quarterly paperwork with the federal government.
AT&T and Verizon have both broken out the cost of the phone separately and have done away with the early termination fee, but they've both figured out a way to charge you twice: break out the cost of the phone, plus charge you the same for your monthly service as you paid before, when you were paying for the phone subsidy.
I make no secret of my preference for T-Mobile : the company has made its plans cheaper to use than the competition, and what's more, they're being more up front about the costs that you're being charged, so you can see it coming. T-Mobile is giving you a discount for buying your phone outright, while AT&T and Verizon don't.
I'm a T-Mobile customer, and the family plan we have nets us about $100 a month savings compared to our old, similar plan with AT&T. That's for a similar data cap and the same capabilities, like Wi-Fi hotspot capabilities.
The problem is T-Mobile's coverage. If you're in an area with T-Mobile LTE service, you're in great shape - their LTE transfer speeds typically outpace AT&T and Verizon by quite a bit. But get outside of those areas and T-Mobile service can take a nosedive. T-Mobile is a GSM carrier like AT&T, but they use different frequencies, and their coverage inside of buildings and other structures isn't as strong either. T-Mobile's building out their network as fast as they can, but it's taking time. I'm willing to put up with it because of the savings, and because I don't want to fork over any more money to AT&T. Your mileage, as in all things, may vary.
No free lunch
Americans have gotten accustomed to paying $200-$300 up front for the latest smartphone, but they cost a lot more than that - more than double that for the highest-end phones. That price seems to be pretty steady. Any way you slice it, smartphones are expensive, and that price isn't going to go down very much. Manufacturers keep packing more capabilities into them, and that engineering and R&D costs money that gets passed along to consumers.
For years, cell phone service providers in the US have buried those subsidy charges into their monthly fees, imposing stiff penalties if you try to break your contract to make sure they don't end up losing money if you walk away early. Some of them, like AT&T and Verizon, are still trying to get away with charging you that subsidy, even if they're presenting what appears superficially like a better deal.
Having said that, there may be very good reasons for you to jump on board with any of these new programs. You may not be able to pay for a new phone up front, for example. Many of us like to have the newest shiny thing as soon as we can - regardless of whether our cash flow allows it. Both T-Mobile and Verizon's plans let soothe that itch (presuming we're not trapped by a specific vendor's upgrade cycle). AT&T's annual plan may be more on track for some vendor upgrade cycle's like Apple's, but you'll still end up paying about half the overall cost of your phone with nothing to show for it in the end.
If you're using AT&T or Verizon, it may not make any sense to pay for your phone separately if you're not going to get a better deal.
In the end, look at the individual costs of each program and figure out what best meets your needs. But understand that, as science fiction author Robert Heinlein observed in The Moon Is A Harsh Mistress, there ain't no such thing as a free lunch. Smartphones aren't cheap, and you're the one footing the bill.