updated 07:04 pm EDT, Sat April 6, 2013
Verizon CEO says it would be 'pretty easy' to switch to no-contract
Verizon CEO Lowell McAdam says it would be "pretty easy" for the nation's largest carrier to switch to a no-contract structure like T-Mobile recently did. Speaking at a New York event this week, McAdam said he was happy to see T-Mobile trying out other pricing structures, and that he would be paying attention to how well T-Mobile's bid goes. McAdam said that it was possible Verizon could put forward such a structure if consumers started asking for it.
"I'm happy when I see something different tried," McAdam said, according to CNet. "We can react quickly to consumers' shifting needs."
McAdam's comments come as T-Mobile attempts to disrupt the current pricing model in the carrier industry. Languishing in fourth place for some time now, T-Mobile has moved to a non-subsidized phone pricing model. The carrier now has customers pay more in the first 20 month after buying their device, but thereafter their bills go down.
Verizon, AT&T, and Sprint -- all ahead of T-Mobile in customer base size -- subsidize the cost of a customer's phone up front, making the money back over the duration of a carrier contract. This sort of arrangement, though, has a negative impact on a carrier's earnings, especially when it involves a more expensive handset like Apple's iPhone.