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Verizon CEO McAdam is thinking about ending subsidized pricing

0. phoneArena posted on 04 Apr 2013, 14:02

Verizon CEO Lowell McAdam, one time CEO of the Wireless division, said at a company event on Thursday that Verizon would be open to eliminating two-year contracts and is monitoring consumer response to T-Mobile's decision to end subsidy pricing on new handsets; McAdam said it would be easy for Verizon to get rid of contracts especially if customers ask about it...

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posted on 04 Apr 2013, 14:08 5

1. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

Phone subsidies going away would be a huge win for the carriers - the phone expense is generally charged in the month the phone is purchased, with the revenues for the service occurring over the 24 months of the contract. The front-end expense of acquiring the phone goes away with the end of carrier subsidies.

posted on 04 Apr 2013, 14:45 5

12. ibap (Posts: 785; Member since: 09 Sep 2009)

But they'll lose the handcuffs, or noose, or whatever you want to call it. The real question is will there be "unlocked CDMA phones" so you can change carriers at will?

posted on 06 Apr 2013, 00:10 1

48. HäckeMáte (Posts: 168; Member since: 28 Feb 2012)

Im assuming Verizon is refering to LTE since it uses a SIMcard. CDMA is their old technology that they will be phasing out.

posted on 09 Apr 2013, 15:03

54. jcarrigan (unregistered)

the problem is that Verizon is still the most expensive carrier and if they stay that way then no customer would pay a down payment on a phone and monthly payments on a phone AND the carrier plan if they do not drastically drop their prices.

posted on 04 Apr 2013, 19:19 2

34. TheMan (Posts: 493; Member since: 21 Sep 2012)

I agree that dropping subsidies would be great for carriers. For example, every study I read projected downward pressure on carriers' profit margins once they offered iPhone, partly driven by users more frequent model changes.

It would be interesting to see how market share would be affected by full retail pricing. I wouldn't mind (as long as monthly service price drops accordingly).

posted on 07 Apr 2013, 04:42

52. PAPINYC (banned) (Posts: 2315; Member since: 30 Jul 2011)

I agree!! But, I know alot of cheap people who would never fork over $700 plus for a phone; they would rather jump ship to something like Virgin Mobile on the outdated and bottle-clogged Old Yellar Network.

I have no problem paying "Full Retail" as long as the phone is worth it. That said, it has to have at least a 5.3" screen; it must have expandable memory; it's got to be at least Quad-Core; and, it can't be restricted to iLooneyTunes.

posted on 04 Apr 2013, 14:14 6

2. bojan (Posts: 188; Member since: 06 Oct 2012)

verzion is money hungry even if they remove subsidies there plans are very expenisve for less services they will never come close to Tmobile prices and service tmobile will always be best.

posted on 04 Apr 2013, 15:16 9

17. DFranch (Posts: 254; Member since: 20 Apr 2012)

No argument on prices, but coverage isn't great.

posted on 04 Apr 2013, 15:26 5

18. CoveyD (Posts: 8; Member since: 04 Nov 2012)

I dont understand how you can say VZW has less service, I have represented the top 3 carriers and have always found big red to be on top of the game. More expensive yes, customer service sucks yes, coverage and actual service, big red IMO.

posted on 04 Apr 2013, 17:34 5

29. roscuthiii (Posts: 2241; Member since: 18 Jul 2010)

I believe 'DFranch' was referring to T-Mo's coverage...

posted on 06 Apr 2013, 00:11

49. HäckeMáte (Posts: 168; Member since: 28 Feb 2012)

COVEY learn to read... ALL of the comment, before you say something dumb

posted on 04 Apr 2013, 14:16 6

3. cwdavis84 (Posts: 1; Member since: 28 Oct 2009)

as long as they let those of us that still have an unlimited data plan buy a phone using this method.

posted on 04 Apr 2013, 14:36 3

8. ibap (Posts: 785; Member since: 09 Sep 2009)

You know that saying about when Hades freezes over?

posted on 04 Apr 2013, 14:17 2

4. yonith (Posts: 174; Member since: 11 Sep 2012)

The model seems very similar to me - pay a down payment and pay off the rest during monthly installments. How is this different than paying 200 and waiting 2 years for the contact to be over? You pay the remainder of the full retail price as an early termination fee if you leave the carrier to my understanding. Can someone clarify this for me?

posted on 04 Apr 2013, 14:27 3

6. ThePro (Posts: 26; Member since: 03 Nov 2012)

In contract you still have to pay the monthly fee, and you have to pay to end the service.

Without the contract you pay the price and keep paying the phone, but you can cancel the actual service and just keep paying the phone itself.

posted on 08 Apr 2013, 22:57

53. 9thWonderful (Posts: 232; Member since: 24 Jan 2013)

Or you can pay the early term fee and not worry about the service cost. full retail for an iPhone 5 is $650. its $199 w/a 2 year agreement and if you term early its up to $350 (prorates down as months pass) which ends the service agreement. $350 + $199 = $550 so you actually save $100 by doing a contract. to say you're not on a 2 year contract for the service but enforce an agreement for the device cost...is just shifting contracted terminology. its not diff. than subsidized pricing in any way b/c the device isn't unlocked until you pay it off. correct me if i'm wrong, but isn't this the same as paying a fee to terminate some form of a contract?

The only win/win is that carriers don't lose upfront revenue in subsidizing equipment and customers can leave if the service gets too much for them.

posted on 04 Apr 2013, 14:44 6

11. ibap (Posts: 785; Member since: 09 Sep 2009)

Depending on the price you pay for service, you can end up paying way more than the price of the phone over the 2 years. Plus, if you keep your phone, or get one from a family member or buy one on ebay, why are you paying the same monthly price as when you got a new phone?

posted on 04 Apr 2013, 20:59

35. laheelahee (Posts: 213; Member since: 09 Apr 2012)

because you can keep using the phone for 2+ years, but dont have to keep paying the high monthly fee

posted on 04 Apr 2013, 14:27 2

5. bubbadoes (Posts: 1225; Member since: 03 May 2012)

good..i hope it happens..and when the subsidies go away, then so should signing a two year contract. Who has a phone anyway for two years, way too long. Get like T-mobile, pay $99 or so down, then pay the phone off in installments like 24 months or less. They are already doing tablets like this and they cost more than the phones. As for comment # 2. I hear you, but then I don't.. No one comes close to Verizon LTE, look at all the other carriers LTE network..pitiful. so you pay for what you get. i have 4G/PURE LTE everywhere I go, not some wifi- 3g wifi max or anything else the carriers are saying they have. Look at Sprints network coverage in Florida. No LTE anywhere!!! period..that is why they can afford to still offer unlimited..because they aren't spending money on their network, it's all tied up to Apple for the next years to come!!! That's my take. Let the thumbs down begin.

posted on 04 Apr 2013, 14:42 3

10. Twashbush (Posts: 47; Member since: 08 Jun 2011)

I agree with you as I have a 5 line family plan with unlimited data on verizon still and pay their price because I can travel to see my family in south florida,texas,northern missouri,Arizona,Cali and have 4g 90% of the time to steam music from my fav. home area stations with iheartradio or video for kids tablet. so yes i pay more but get more for it.

I for one would be ok with verizon ending subsidized pricing as long as they brought back unlimited data plans for all. As I have to pay full retail for my phones to keep my unlimited plan anyway

posted on 04 Apr 2013, 15:02 2

13. iansltx (Posts: 2; Member since: 04 Apr 2013)

Nah, Sprint just is being conservative with their coverage maps at this point because they got bitten when launching Atlanta, DFW, etc. WAY under-completed (which has since been fixed). A fair amount of FL now has LTE; my mom was in the West Palm Beach area last week, and was able to turn her Galaxy Victory into a WiFi hotspot, using LTE, without issue.

Before you say that I haven't used the awesomeness that is Verizon, I've taken plenty of trips between Texas and Florida (by car) with my LTE iPad. Sure, LTE is great, and VZW's coverage eclipses Sprint's right now. Verizon is also significantly more expensive than Sprint, unless you're buying a 1GB iPad plan or the like (even then, $20 for 1GB is expensive).

posted on 04 Apr 2013, 16:39 4

23. androiddownsouth (Posts: 598; Member since: 02 May 2012)

And Verizon reinvests more money into it's network than any other provider. The coverage area proves that. Verizon will have full LTE rollout done by the end of the year, and then looking towards LTE Advanced next year. No other carrier is even CLOSE to that level of service provided. Don't expect a BMW when you are on a Kia budget.(No offense to Kia, they are building better cars these days, but they are not close to BMW, imo)

posted on 04 Apr 2013, 14:30

7. bubbadoes (Posts: 1225; Member since: 03 May 2012)


don't get LTE confused with 4G wimax

posted on 04 Apr 2013, 14:38 3

9. Jeradiah3 (Posts: 1121; Member since: 11 Feb 2010)

Those that are tech savvy knows the difference between LTE and WiMax and theres no comparison that LTE blows away WiMax lol. As for ending subsidized pricing, I dont know what to think about that. whether you are locked into a 2yr contract OR make monthly payments on a phone but not locked into a carriers plan..................you're still paying alot of money for a phone. I dont see the difference between the 2. I do agree that most people dont keep their phones for the full 2 year contract. what they should do is to make people upgrade eligible after a year. with they way technology is advanceing by the minutes, it makes more sense

posted on 06 Apr 2013, 00:13 1

50. HäckeMáte (Posts: 168; Member since: 28 Feb 2012)

The difference is when your done paying for your phone the price drops. While subsidized you pay the same high price foreverrrr

posted on 04 Apr 2013, 15:03 1

14. iansltx (Posts: 2; Member since: 04 Apr 2013)

If you knew what you were talking about, you'd be looking at Sensorly coverage maps. Not the atrocities that the carriers pass off as coverage maps. I mean, look at Verizon's data map.

posted on 04 Apr 2013, 15:10

15. bubbadoes (Posts: 1225; Member since: 03 May 2012)

i love it

posted on 04 Apr 2013, 15:16 1

16. iammobilechris01 (Posts: 11; Member since: 01 Apr 2013)

verzion is money hungry. Tmobile prices and service are best. Contracts are wack.

posted on 04 Apr 2013, 16:15 6

21. androiddownsouth (Posts: 598; Member since: 02 May 2012)

Tmobile service is best? That is laughable dude. Maybe in the rare spot, but overall, Verizon is the best service, like it or not. There isn't a Verizon customer alive that doesn't wish the service was cheaper, but at least you get high end service for that larger service fee, imo.

posted on 04 Apr 2013, 22:40 2

39. johnriii (Posts: 240; Member since: 17 Oct 2011)

I've been with verizon for ten years, and I travel a LOT. I bet I've dropped less than ten calls in that time, and I rarely, if ever have a problem getting a good signal. T-mobile is the in 4th place in a four division race. They're improving, but can't hold a candle to Big Red.

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