Verizon Ready To Follow T-Mobile’s Lead And Drop Contracts
Verizon CEO Lowell McAdam told reporters today that his company will be watching the response T-Mobile gets from its “Un-carrier” initiative. If T-Mobile gets a strong response, Verizon will change its business model fast.
“I’m happy when I see something different tried,” McAdam told CNET. “We can react quickly to consumers’ shifting needs.”
John Legere, president and CEO of T-Mobile USA wanted to shake up the industry when he took to the stage in New York City to announce that T-Mobile would begin selling Apple’s iPhone starting April 12. He called the wireless industry, “out-of-touch” with what’s best for mobile phone customers.
T-Mobile was last to get iPhone because it’s network uses wireless technology that wasn’t built into early iPhone models. Dropping contracts and lowering monthly service rates was a bold move intended to get the attention of customers frustrated by service from Verizon, AT&T, and Sprint.
T-Mobile’s plan gives customers the option to buy an iPhone for $99 down and paying off the rest over time. It service plan will cost customers about $500 less per year than they would pay Verizon or AT&T.
For the Verizon CEO to respond so quickly and so positively to Legere’s leadership shows how much the wireless industry needed a change but seemed to be stuck waiting for someone to make the first move.
Verizon has the largest 4G LTE network, so if it moves quickly to match T-Mobile’s contract-free pricing, it has an advantage in terms of nation-wide coverage outside of major metropolitan areas.
