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Verizon CEO says he's open to dropping contracts

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macrumors 65816
Original poster
Apr 3, 2012
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http://news.cnet.com/8301-1035_3-57577842-94/verizon-ceo-says-hes-open-to-dropping-contracts/
CEO Lowell McAdams says the company could easily shift to the model if consumers begin demanding it.

Verizon
Verizon CEO Lowell McAdam cracked open the door to a full no-contract wireless world.
McAdam said it was "pretty easy" to change up the model to eliminate contracts, and added that he would watch the consumer response that T-Mobile gets from its recent decision to drop contracts and phone subsidies altogether. He indicated a willingness to follow suit if consumers start asking for it.
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AT&T
McAdam isn't the only one to express his interest in the area. AT&T CEO Randall Stephenson said in January that he had entertained the idea of making consumers pay for their own smartphones in exchange for a lower rate.
Carriers have reason to hate subsidies too. While the contracts bind consumers to the carrier for two years, the subsidy portion often takes its toll on the profitability of the business.
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I guess this all will depend on how successful T-Mobile will be.
Success = other carriers adopting this method of paying the phone and service separately
Not Successful = status quo

T-Mobile_Simple_Choice_Plans-630x206.jpg


Line 1: $50 -------------(unlimited talk, unlimited text, 500MB of 4G speed)
Line 2: +$30 --------------(unlimited talk, unlimited text, 500MB of 4G speed)
Line 3: +$10---------------(unlimited talk, unlimited text, 500MB of 4G speed)
Line 4: +$10---------------(unlimited talk, unlimited text, 500MB of 4G speed)
Line 5: + $10--------------(unlimited talk, unlimited text, 500MB of 4G speed)



$10 upgrade for extra 2GB at 4G speed. $20 upgrade for unlimited at 4G speed.
 
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It does not have to be one or the other. It would be good to have a choice for those that want to maintain contracts. The important issue is that an alternative for those who have their own phone should be available from all carriers. This should take into consideration that there is no subsidy and the benefit reflected in the monthly rate.
 
Lipservice. These behemoths like their customer-no-service business model and captive subscribers. What would become of their mammoth profits and gigantic executive bonuses if unhappy customers could just leave?
 
I want European plans. You can get unlimited talk, text, and data for like $40 a month in some places over there. I'll gladly dish out $600 for a phone with plans like that. Hell, I would probably even sign a contract.
 
It'll be awhile before I can switch and contribute to TMobile's success :(
 
I can see them dropping contracts, but the savings won't be that much better, I wouldn't think. As it stands, they don't even offer any savings on phone OFF of contract.

Personally, it is not so much the contract that is bothersome, it is the monthly rates even after that contract has been fulfilled. The ETF is already set up to pay off the retail price of your phone if you decide to leave the company early. I would have to see, I guess, but I am not holding my breath. I certainly don't see verizon offering unlimited voice/texts and a couple gigs of data for $50 like TMO.
 
If it meant lower monthly plans I would be all for it, but with verizon and att I'm sure they wouldn't do too much.

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lordofthereef said:
I can see them dropping contracts, but the savings won't be that much better, I wouldn't think. As it stands, they don't even offer any savings on phone OFF of contract.

Personally, it is not so much the contract that is bothersome, it is the monthly rates even after that contract has been fulfilled. The ETF is already set up to pay off the retail price of your phone if you decide to leave the company early. I would have to see, I guess, but I am not holding my breath. I certainly don't see verizon offering unlimited voice/texts and a couple gigs of data for $50 like TMO.
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Even if they would make it like $70-75 that is still cheaper than what they currently offer( verizon that is)
 
Premium1 said:
Even if they would make it like $70-75 that is still cheaper than what they currently offer( verizon that is)
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Right. What I am saying is, I don't think they will is all. :)

What I CN imagine is seeing a plan that is $5-10 cheaper per month, but once you get a phone with it, you end up paying more over the two years time than you would have with old contract plans. Let's be honest with ourselves. That is how Verizon has always rolled.
 
lordofthereef said:
Right. What I am saying is, I don't think they will is all. :)

What I CN imagine is seeing a plan that is $5-10 cheaper per month, but once you get a phone with it, you end up paying more over the two years time than you would have with old contract plans. Let's be honest with ourselves. That is how Verizon has always rolled.
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Oh you know it ha, if they do this it will only be so verizon makes more money
 
I would prefer to have a lower monthly, but if your only talking about saving a few dollars over what I have with AT&T now, then I am not down for it.

They would have to offer me the 4G of shared data for my 3 Lines for like $100.00 or less per month for it to be worth losing the sub on the phones. I would then just keep my phone for 2-3 years or however long I can, as apposed to getting a new one every year.
 
lordofthereef said:
I can see them dropping contracts, but the savings won't be that much better, I wouldn't think. As it stands, they don't even offer any savings on phone OFF of contract.

Personally, it is not so much the contract that is bothersome, it is the monthly rates even after that contract has been fulfilled. The ETF is already set up to pay off the retail price of your phone if you decide to leave the company early. I would have to see, I guess, but I am not holding my breath. I certainly don't see verizon offering unlimited voice/texts and a couple gigs of data for $50 like TMO.
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Actually the ETF may or may not be enough and that's if they pay it.

Buy a phone for 200, you decide you don't want it a month or 2 later and pay 350. You got the phone got 550 instead of the 650 it costed
 
I would be down with T-Mobile if it was more than 500mb a month for $50, maybe 2 or 3gb sure. If I add the extra $20 for an extra 2gb it really doesn't save me much over what I pay for AT&T monthly currently and I have a little over 3gb per month. Plus I didn't have to pay for my phone full retail. Dropping contracts and paying full retail for a phone is cool and all IF it saves me alot more monthly!
 
Ta0jin said:
I would be down with T-Mobile if it was more than 500mb a month for $50, maybe 2 or 3gb sure. If I add the extra $20 for an extra 2gb it really doesn't save me much over what I pay for AT&T monthly currently and I have a little over 3gb per month. Plus I didn't have to pay for my phone full retail. Dropping contracts and paying full retail for a phone is cool and all IF it saves me alot more monthly!
Click to expand...
It's $50 for 500mb
$60 for 2gb
$70 for unlimited
 
thehustleman said:
Actually the ETF may or may not be enough and that's if they pay it.

Buy a phone for 200, you decide you don't want it a month or 2 later and pay 350. You got the phone got 550 instead of the 650 it costed
Click to expand...

Though I haven't seen numbers, chances are Verizon, and all carriers really, are getting these phones for less than retail. Look at Tmobile. They are offering you $20/mo to pay off your phone. That comes out to $580 for the phone instead of $650.

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osofast240sx said:
what happen to 3G?
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I think it is unlimited 3G after that. In any case, what really matters is what speeds you get at each soft cap, and then what speeds you get after you've hit the soft cap. They can call it 3G, 4G, ABCDE, whatever they want, as long as browsing the net, at a minimum, is viable.
 
Ta0jin said:
I would be down with T-Mobile if it was more than 500mb a month for $50, maybe 2 or 3gb sure. If I add the extra $20 for an extra 2gb it really doesn't save me much over what I pay for AT&T monthly currently and I have a little over 3gb per month. Plus I didn't have to pay for my phone full retail. Dropping contracts and paying full retail for a phone is cool and all IF it saves me alot more monthly!
Click to expand...

You didn't pay full retail you paid even more hidden in the contract...
 
lordofthereef said:
Personally, it is not so much the contract that is bothersome, it is the monthly rates even after that contract has been fulfilled.
Click to expand...
The assumption, if you read and consider the context of the OP, is that the elimination of contracts and lowered service rates would be mutually inclusive.

lordofthereef said:
Right. What I am saying is, I don't think they will is all.
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I don't think VZW will either but I wouldn't mind being proven wrong. The big 2 rarely seem to be influenced by TMO and Sprint. They do, however, seem to follow each other.
 
All those fools care about is "will we make less $$$".

Don't think for a minute that AT&T/Verizon will end contracts if it means it'll lower the average profit margins their making from their "forever subsidized" plan pricing models.

When T-Mobile's network improves and becomes closer to parity with the other carriers (4G & LTE coverage) and IF T-Mobile starts stealing a noticeable chunk of customers THEN and only THEN do I see AT&T and Verizon going the contract-less route with lower plan prices. Sprint on the other hand may follow suit faster as they a very distant #3 carrier in the US. AT&T and Verizon dominate in the US.

I applaud T-Mobile for what they are doing but make no mistake they really had no choice. They had to be cheaper and they chose to do it with contract-less plans. AT&T and Verizon definitely are not happy about it but right now due to T-Mobile's limited 4G and LTE coverage they don't feel as though T-Mobile is much of a threat. Hopefully that changes sooner rather then later.

It's a breath of fresh air to see "actual" competition in the wireless industry. I have always thought through all these years there has been a gentlemanly agreement between all the wireless carriers to compete "softly" as all their plans were eerily similarly high-priced (kinda like Cable-TV/Dish/Direct-TV/U-Verse).
I hope T-Mobile does well and I'd seriously consider breaking my contract and switching to them if their 4G coverage was available in my area. Perhaps in another 6 months.
 
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