The Wall Street Journal recently caught up with the CEO’s of Verizon Wireless and AT&T Wireless and asked them what they thought of T-Mobile’s move towards ending phone subsidies. With T-Mobile moving towards ending device subsidies at the end of the month, the carrier will instead offer low priced plans and interest free financing. Could this be a sign of things to come in the U.S.?
As I recently reported, T-Mobile is moving towards ending mobile phone subsidies this month. T-Mobile is eliminating subsidies in conjunction with only offering offer its economy Value Plans which are much more cost conscience than most other provider plans. In order to be more accommodating to its customers, T-Mobile is going to allow it’s current and future consumers to finance the cost of their new smartphone over the terms of their contract with T-Mobile (approx. 20 months). T-Mobile customers will be able to buy a smartphone from T-Mobile outright or use a smartphone from another venue. T-Mobile will still require customers to sign a 2 year contract – whether or not they purchase their smartphone from T-Mobile.
This news has not only caught the eye of T-Mobile’s loyal customers, but also the eye of their major competitors – Verizon Wireless and AT&T. Both CEO’s have expressed a cautious interest, stating that they are not sure that their customers are ready to pay full price for mobile phones. Both have stated they will wait and see how this new endeavor works out for T-Mobile.
The best way for both companies (Verizon and AT&T) to see if ending subsidies works would be to offer a new program alongside their existing subsidized phones. I would envision a program where the plans are cheaper than the carriers currently offer for customer willing to go without a phone subsidy. Let the customer choose which direction they (the customer) want go – the subsidized or unsubsidized route. This would allow both Verizon Wireless and AT&T to gauge their customers opinions on which option will better suit the majority of customers.
As a Verizon Wireless customer this news has me intrigued, but I am unsure how Verizon will be able to implement a no subsidy program which is also consumer friendly.
Will Verizon allow users to bring non-Verizon Wireless sold phones to their network? For example, will Google be able to develop a Nexus phone that works on VZW's network without carrier “meddling”? Will Verizon customers have the same ability that their friends on T-Mobile and AT&T have to buy a Nexus directly from Google and receive update directly from Google?
If Verizon Wireless moved in this direction, I would ask where to sign up immediately.
Before you ask me what I am smoking, the realist in me says Verizon Wireless will never give up the choke hold it has on it’s network. But if they wanted to do it right and be responsive to their customers, Verizon Wireless would let customers have the ability to use new phones not purchased directly from Verizon on their system.
So what do you think? Is the possibility of Verizon Wireless and AT&T moving towards eliminating subsidies a good or bad thing? Should they move in that direction would you consider switch from your current carrier? Leave your opinion below in the comment section.