Late last month, T-Mobile unveiled its Simple Choice plan and with it brought an end to traditional contracts. Since then, Verizon’s CEO Lowell McAdam has suggested that T-Mobile’s new direction is an interesting one and that Verizon would potentially consider a similar move, at least if there was enough customer interest.
As it turns out, there are at least 60,603 petitioners at the time of this writing that are in fact interested in such a change. The petition was formed about a week and a half ago by Verizon customer Mike Beauchamp, and has since gained quite a bit of traction.
I believe that people should have the freedom of choice ... to move freely between carriers. I think that model where you tie customers in for two or three years is a tired model that doesn't need to exist anymore.
The idea would be to replace Verizon’s traditional contract cycle with a plan where customers would pay upfront for phones, without being locked into a service term. For those that couldn’t afford to pluck down full-price outright, Verizon would hopefully turn to a similar model to T-Mobile, where you pay around $99 upfront and the rest through 24 monthly payments.
How is being stuck with two years worth of payments any different than being stuck with a contract for that amount of time? The biggest difference is that there is no early termination fee for leaving, though you would still be obligated to finish paying off your phone.
No-contract plans could also be very appealing for people who wish to change their phone out every year to keep up with the latest smartphone flagships. These type of users could enter into a payment agreement for a handset and then pay it off a year early in order to move on to a new device.
In short, it is all about having more flexibility as a buyer. In many ways the move could also be good for Verizon. Verizon wouldn’t have to worry about subsidized pricing and instead of an ETF, they would require the person to pay off the remaining balance of the handset purchased.
Now the big question is whether or not Verizon will listen to this petition. It is certainly possible, especially given Verizon’s CEO’s positive comments on the idea. In fact a recent rumor even suggests that Verizon might already be preparing to introduce a device payment plan for those that want to skip the contract. For those that wanted to stick with a contract and subsidized phone, that option would still exist as well.
What do you think of the idea of paying upfront or getting involved with a device payment plan if you can’t afford to pay for the device outright? Is this a better way for a carrier to operate?