Verizon and AT&T May Ditch Phone Subsidies, Too
By Todd Haselton | 3
Verizon Wireless and AT&T may decide to ditch subsidies on phones in the future, a move that would mimic T-Mobile’s recent decision to do so. That means you’ll need to cough up the full price of a phone when you pick one up (about $500-$600 for today’s hottest smartphones) instead of paying just $199 or $299. Sounds like a tough pill to swallow, doesn’t it? The good news is that Verizon and AT&T may not adopt the plans until customers actually want them.
Speaking with The Wall Street Journal recently, Verizon CEO Lowell McAdam said that T-Mobile’s move to ditch subsidies “is a great thing.” The big question, of course, is how wireless customers will react to such a move. Would you still be as excited about the Galaxy S III or the iPhone 5 if you knew it was going to cost twice, or even three times as much at the time of purchase? Maybe not — even if you do end up paying that full price over the end of a two-year contract.
So what about AT&T? The carrier doesn’t seem to be as bullish on the idea just yet. “Our research says that [our customers] don’t like paying upfront for the phone,” AT&T Mobility CEO Ralph de la Vega said. “There didn’t seem to be the appetite for that kind of plan.”
I’m not sure how I feel about the changes yet—I like seeing a lower sticker price and hiding the cost of a big purchase in payments over 2 years.
