Verizon CEO: Going contract-free would be 'pretty easy'
Verizon's CEO said recently that it would be "pretty easy" for the nation's largest carrier to switch to or add a no-contract pricing structure, so long as customers appeared to be interested in such an offering.
Verizon's Lowell McAdam (right) with Google's Eric Schmidt
T-Mobile recently made headlines in wireless industry news, abandoning the traditional subsidized smartphone and carrier contract model for a payment structure that has customers paying more up front for their handsets and less as time goes on. Speaking last week at an event in New York, Verizon CEO Lowell McAdam said the move was interesting and that he'd be paying attention to how T-Mobile fared in the future.
"I'm pretty happy when I see something different tried," McAdam said, according to CNet. In addition to keeping an eye on T-Mobile's progress with the model, McAdam said that it would be "pretty easy" for Verizon to move to a no-contract structure if its customers looked like they'd be interested in such.
"We can react quickly to consumers' shifting needs," McAdam said.
McAdam spoke at an event aimed at promoting Verizon's push to encourage development of education, health care, and environmental sustainability apps that run on Verizon's network.
Verizon, AT&T, and Sprint ? the three carriers ahead of T-Mobile in terms of subscriber base ? all offer subsidized smartphones with one- or two-year contracts. Customers are able to get new phones without a contract, but doing so requires that they pay the full price of the handset up front, and none of the carriers heavily promote that option.
Coverage of T-Mobile's no-contract announcement was mixed, with many outlets noting that the arrangement would save consumers between several hundred and a thousand dollars over the span of a typical two-year contract. Others were more skeptical, saying that the need to pay for a phone in full simply puts a different name on the standard carrier contract model.
Verizon has in the past year already shaken up its contract offerings, killing off unlimited data plans in a move to push users toward data share packages.
Verizon's Lowell McAdam (right) with Google's Eric Schmidt
T-Mobile recently made headlines in wireless industry news, abandoning the traditional subsidized smartphone and carrier contract model for a payment structure that has customers paying more up front for their handsets and less as time goes on. Speaking last week at an event in New York, Verizon CEO Lowell McAdam said the move was interesting and that he'd be paying attention to how T-Mobile fared in the future.
"I'm pretty happy when I see something different tried," McAdam said, according to CNet. In addition to keeping an eye on T-Mobile's progress with the model, McAdam said that it would be "pretty easy" for Verizon to move to a no-contract structure if its customers looked like they'd be interested in such.
"We can react quickly to consumers' shifting needs," McAdam said.
McAdam spoke at an event aimed at promoting Verizon's push to encourage development of education, health care, and environmental sustainability apps that run on Verizon's network.
Verizon, AT&T, and Sprint ? the three carriers ahead of T-Mobile in terms of subscriber base ? all offer subsidized smartphones with one- or two-year contracts. Customers are able to get new phones without a contract, but doing so requires that they pay the full price of the handset up front, and none of the carriers heavily promote that option.
Coverage of T-Mobile's no-contract announcement was mixed, with many outlets noting that the arrangement would save consumers between several hundred and a thousand dollars over the span of a typical two-year contract. Others were more skeptical, saying that the need to pay for a phone in full simply puts a different name on the standard carrier contract model.
Verizon has in the past year already shaken up its contract offerings, killing off unlimited data plans in a move to push users toward data share packages.
Comments
Of course, "easy" doesn't always help them mine your wallet.
To me a 2 year contract is a better deal as long as your staying with the carrier you started off with.
Which for 99% of the time is true for me.
Just do your research before you buy as there are ups and downs with every network.
Sure, I can't switch iPhones for 18 months but even with t-mobile's plan, you will pay for the upgrade.
Nice to see new options though.
No contracts would be much better for Apple.
Lower monthly payments, and it would expose the farce that is android costumer support and how carriers + OEMs [don't] handle updates.
For most fandroids software updates don't matter because they have the galaxy S for x months until the note comes out, then they buy the new galaxy S, etc.
It would be great for Apple to invest more in Europe (+stores, +apps, + brand support) and price their devices accordingly. (700 euros for a phone? No.)
Quote:
Originally Posted by StephanJobs
I don't know.
To me a 2 year contract is a better deal as long as your staying with the carrier you started off with.
Which for 99% of the time is true for me.
Just do your research before you buy as there are ups and downs with every network.
Sure, I can't switch iPhones for 18 months but even with t-mobile's plan, you will pay for the upgrade.
Nice to see new options though.
How is a two year contract better? Setting service quality aside, the price of the subsidy is more expense then T-Mobile's plans even when you add in the monthly phone option. Moreover, being able to leave is always better. It keeps the carrier honest.
Quote:
Originally Posted by AJMonline
The T-mobile plan would not save someone like me as I typically upgrade every two years, however for someone like my wife it would make a big difference in year 3 as she typically gets every third model. I am considering testing t-Mobile when my kids cell contract is up. I'll get a real world test of their coverage in my area and there is no penalty if it does not work out.
If you are on Sprint, AT&T or Verizon, I don't see how. If you choose payments over two years, you are going to pay $20 a month on top of your T-Mobile bill. So if you get the cheapest unlimited plan, which is $50 a month, you are paying $70 a month total. You pay less down, $99 dollars, and the phone only costs $580 as opposed to the full retail price of $650. Even if you want a new phone every two years, the entry price of the phone is cheaper ($99 as opposed to $199) and the price of the plan is cheaper even including the phone subsidy. T-Mobile's family plans even become a better deal, unlimited plans starting at $80 for two lines.
I have priced every major networks plans, and even with installment payments of the phone added into the plan, it is still cheaper on T-Mobile.
Quote:
Originally Posted by Everett Ruess
I would rather pay full pop up front for an iPhone (like I did with my 4g iPad) then get a reasonable priced month to month data plan. T-Mobile deal is still a 2 year contract, it just shifts contract to hardware & basically same price as a good carrier 2 year contract
With most carriers you are entering into one long term contract that covers the phone and service. With T-Mobile you are entering into two contracts. One is a month to month service contract, and the other is a contract for the sell of the phone. The phone contract is only a two year contract if you choose to take two years to pay it off. If you pay it off in two months, it is a two month contract. For what it is worth, you would probably be foolish not to take the two years as T-Mobile is essentially giving you a zero percent loan. Put your money to work somewhere else.
Quote:
Originally Posted by ascii
If you think you will be using it for 2 years anyway, then a contract is usually the better deal. Data is definitely more expensive on pay as you go.
Yes, but T-Mobile's plans aren't pay as you go. They are monthly unlimited no contract plans. Every month the contract renews unless you cancel. Show me an AT&T, Sprint, or Verizon contract plan that includes unlimited voice, texting, hotspot, and something resembling unlimited data for $50 a month ($70 if you included the phone). Good luck.
You're basically getting an interest-free loan on a $650 phone spread out over two years... versus paying the $650 in one lump sum up front. That's a big deal to some people.
If you're gonna stay with the carrier anyway... why not let them finance the phone?
Plus... how often would people change carriers if they could? Every 6 months? That would be a hassle... porting your number and such.
In the United States the carriers all use different frequencies and equipment... so it's not as easy as popping out a SIM card like you can in other countries.
If someone leaves another carrier to go to T-Mobile... chances are they will stay with them for a while. I can't envision people bouncing from carrier to carrier even if they could.
We've had the same 4 nationwide carriers for a while. By now you should know which one works best for you.
Seriously guys. First you make me look at Hugh Laurie's mug, now you can't stop posting pictures of Eric Schmidt.
Well follow my plan.
I upgrade every 2 years. My bill is the same whether I upgrade or not.
If I stay with the same carrier which I have for the past 4 years then I only pay 199$ for 16 gig iPhone
If I understand the t- mobile plan it's 99$ upfront plus 20$ per month for 2 years.
EDIT-"I have T-mobile figures wrong corrected many times over in other posts"
So for me it's cheaper.
EDIT-"I upgrade every 2 years and don't switch service plans as I have a major discount where I am 60$ a mo."
T-mobile may have cheaper plans data and service wise but with that I would just compare the pros and cons individually between the companies.
Id rather not risk jumping ship for saving a few bucks on that issue.
One can always leave, it's just a contract not a gun to your head. Most people upgrade every 2 years so instead of a carrier subsidy you'll have a perpetual self imposed subsidy and service quality is exactly the reason AT&T and VZW have so many customers.
That's what I was thinking. Sprint and T-Mobile have always been "value" carriers compared to Verizon and AT&T.
Yet Verizon and AT&T have 2 to 3 times as many subscribers. I wonder why...
Maybe you do get what you pay for
I think it's great that T-Mobile is trying something new in the US. The no contract thing is nice... but you now have to buy your phone outright. And your monthly service will be cheaper on T-Mobile... but you may have poorer coverage.
Quote:
Originally Posted by ascii
If you think you will be using it for 2 years anyway, then a contract is usually the better deal. Data is definitely more expensive on pay as you go.
Do people even compare the numbers before making such claims? You know, column A, price after 2 years, and column B, price after 2 years, and see which is higher?
Agreed. My brother in law bought a Samsung Galaxy (3 or 4) today (he knows nothing about phones), but he did ask me how much an iPhone costs about 3 months ago. I just knew when I saw that phone that he bought it because the iPhone 5 was too expensive. He asked me "is that a good phone?" when I had the phone in my hand, but the first thing I noticed was very pixelated anti-aliased text at the bottom of the screen. I was think Oh, WTF!?, but I played it cool and said I didn't know what type of phone it was. "Jesus I don't know what phone it is, what is it a galaxy?"
When he went off I thought I should have said why didn't you get an iPhone? But I guess I knew the answer. I guess I was half thinking I wonder if the guy in the shop pushed it on him? I'm thinking the brother in law knew my answer was quite political. I could have just as easily vomited over the phone in reply to his question. It really was plastic, cheap feeling junk.
Originally Posted by Suddenly Newton
Seriously guys. First you make me look at Hugh Laurie's mug, now you can't stop posting pictures of Eric Schmidt.