As we all know, T-Mobile recently stopped subsidizing phones. This move is a pretty radical departure from the typical business model all carriers promote. Typically, a device is subsidized and a contract is signed, which lowers the upfront cost of the device… but keeps us tied down to carriers for two years or so.
At a conference yesterday, Verizon CEO Lowell McAdam praised T-Mobile’s efforts to end subsidies. He mentioned Verizon was very interested in what T-Mobile was doing, and would be watching them closely. McAdam also said that it would be “pretty easy” to shift Verizon’s contracted model to the new design, if customers were asking for such a thing.
You can go into any carrier and purchase a device off-contract, but it’s not promoted, or even encouraged. T-Mobile is the first to break from tradition and educate customers on unsubsidized devices, rather than just take their money and run. The education of customers is critical to the success of their new venture, and only time will tell if they’re able to successfully do so.
This isn’t the first time McAdam has made favorable comments about T-Mobile’s new path. Back in January, at the Consumer Electronics Show, the Verizon CEO said the shift away from subsidized phones was “a great thing”. He also said Verizon would be keeping an eye on the situation, and that switching to that plan would be easy… so long as customers were interested.
I think I hear an echo…