Verizon Wireless, the largest wireless company in the U.S. said on Friday that it is doing away the practice of subsidizing new phones in exchange of a two-year service contract.

Verizon Wireless is a joint venture between Verizon Communications and Vodafone which uses CDMA technology for 2G and 3G network and LTE technology for the 4G network launched in December of 2010.

The company revealed new plans offering a mixture of discounts and price hikes requiring customers to pay for their smartphone.  Under the new pricing plan, every smartphone line costs $20 a month.

Customers can choose from the four data packages Verizon offers.  It has different capacities of shareable data ranging from small to x-large.  Small package has 1GB for $30/month, Medium has 3GB for $45/month, Large has 6GB for $60/month and X-Large got 12GB for $80/month.

These data packages can be shared up to 10 devices, adding tablets and smartwatches to the list that require a $10 and $5 fees for the monthly subscription.  New and existing Verizon customers can take advantage of these new affordable rate plans starting August 13.

These new plans require no down payments, activation fees or two-year contracts.  The best way to save on Verizon's new plans without contracts is to keep your existing cell phone and purchase the big data package.

Larger plans can save customers a lot more money in the short term and long term.  With the affordable new rate plans from Verizon, customers will exactly know what they are paying for.

According to a Verizon spokesperson, they will no longer offer contracts and device subsidies.  Moreover, Verizon wrote that new Verizon customers wanting to take advantage of the new plan can buy new smartphone using Verizon's device payment option, formerly known as Verizon Edge, or they could pay the retail price.

The Verizon Edge installment plan began in July 2013 allowing customers to switch to a new smartphone provided a 50% cost of the original device was paid off.