We heard a little bit of this back at CES in January, but Verizon's CEO Lowell McAdam said today that he'd be open to getting rid of contracts. In fact he said it was "pretty easy" to change up the wireless carrier model and get rid of contracts, he also added that he would watch the consumer response that T-Mobile receives with their new model which they announced last week. McAdam indicated a willingness to follow T-Mobile if that's what customers want.
Really Mr. McAdam? If you were following what customers wanted, you would still offer unlimited data. McAdam told reporters today "I'm happy when I see something different tried." He added "We can react quickly to consumers' shifting needs".
T-Mobile is attempting to shake up the wireless industry with their new model of no contracts and cheap plans. T-Mobile has gotten rid of contracts and instead customers will pay a smaller up front fee (down payment) along with monthly installments for their device until it's paid off, then their bill goes back to the normal price. So far the consumer reaction to this new model has been mixed. We've seen a lot of people saying "I'm not paying full price for my phone" and others saying "T-Mobile is really smart and undercutting the competition severely" so it could go either way for T-Mobile. But it's definitely a gamble.
T-Mobile has said, even though they are paying for their phone either up front or over 20 months, they will save money over the length of the contract. Because after the 20 months are over, their bill is decreased, depending on which phone they have.
Of course Verizon isn't the only one to express their interest in changing up the wireless carrier model. AT&T CEO Randall Stephenson stated back in January that he'd be interested in doing away with contracts as well.
So how would Verizon handle this? We all know they do anything and everything they can to get more money from their customers. So will they raise prices to get rid of contracts? What do you think, leave a comment below.