Verizon open to eliminating contracts, will monitor T-Mobile's success

By on April 4, 2013, 7:30 AM

T-Mobile’s announcement and launch of a contract-free $50 unlimited talk and text plan last week certainly seems like a sweet deal but it may have further reaching implications than any of us are aware of. I say that because Verizon CEO Lowell McAdam teased the idea of getting rid contacts during a recent company event.

The executive told reporters that it would be pretty easy to change their business model to eliminate contracts. He was quoted as saying he was happy to see something different tried. McAdam said he would monitor customer response of T-Mobile’s decision, noting that Verizon could react quickly to customers’ shifting needs. It certainly sounds like he would be willing to switch to a similar model if it proves successful.

It’s an idea that isn’t totally new as AT&T CEO Randall Stephenson said back in January he had thought about having customers pay for their phones up front in exchange for a lower service rate. No word yet on just how serious he was about this or if he has revisited the idea since T-Mobile’s announcement.

If you didn’t catch T-Mobile’s announcement last week, they are doing away with contracts in an attempt to be more transparent. Moving forward, customers will pay a small fee up front for a handset then an even smaller amount each month until the phone is paid for. The company still needs to work on educating customers, however, as feedback has been mixed thus far.

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