You may be paying a lot more for your smartphone in the future that could be devoid of subisidies. T-Mobile has been slowly decreasing it subsidies and is expect to stop them all togethter later this month.
Those who want to keep their unlimited data at Verizon have had to pay full prices, since last summer. Verizon CFO Fran Shammo expects subsides to decline.
“I’m a believer that over the next two to three years subsidies will start to decrease just because of the ecosystems,” Fran Shammo said at the Deutsche Bank 2013 Media, Internet & Telecom Conference.
He believes that new platforms such as Windows Phone and BlackBerry will increase competition, lower priced phones and the lower subsidies from carriers.
Verizon will move to Voice over LTE (VoLTE) technology later this year, and will no longer offer phones with CDMA radios, which should also reduce the price of smartphone. Customers at some point will need phones that are VoLTe enabled.
Verizon's Lowell Mc Adams is following how T-Mobile works without subsidies and said that Verizon could move to the same strategy if it is successful.
Verizon often hints at changes at conferences before changing policy. Verizon for almost a year hinted that it was going to end unlimited data and then launched shared plans.
The upshot to that is that the more we pay towards the cost of our phones, the less money carriers will be able to justify charging in Early Termination Fees. In fact what justification is there for any fees I you're not using a subsidized phone and there's no balance to recoup? In addition since the rates we have been paying have typically included repayment for a handset, the a plan price should be much lower with no handset repayment in the equation.
If Verizon does reduce or eliminate deals & subsidies, they will be turning over a rock from under which many unpleasant things could emerge. Like customers expecting plans to come down substantially without the subsidy or they leave. Like refusing to accept any sort of ETF combined with a much greater occurrence of customers simply walking away from a carrier as a result of billing disputes, perceived value of services issues and so-on.
This will also be a larger issue if the White House makes good on it's recent response to to a citizen petition to return the DCMA exemptions for unlocking cellphones, especially with respect to GSM carrier networks where a customer can change carriers with a simple SIM card swap.