Getting rid of carrier contracts is a win for customers. Verizon's CEO, Lowell McAdam, has already expressed his willingness to do away with them if consumers speak loud enough about it. So here's your chance: sign this petition to tell Verizon to end carrier contracts and create an affordable way for consumers to purchase their devices. If you're a current customer, you don't have to switch carriers or have plans to switch carriers. I've been a long-time Verizon customer and I don't see myself ever leaving; but I want that choice myself; I don't want them making it for me and imposing stiff penalties if I do decide to leave.
You can follow me on Twitter for updates: @mbchp.
We all know how quickly technology changes in this day and age. Carriers originally introduced contracts as a way to lower the up-front cost of mobile phones at a time when the technology wasn't advancing as quickly. It was also a time when most of us didn't rely on our phones for as much as we do now.
Let's face it; phones aren't really phones anymore. They're data devices for accessing the Internet and everything connected to it, that happen to also make calls. Carriers (including Verizon) have already given up trying to charge for "minutes" -- a shift towards that verifies this trend. Instead, they've created a business model where most of their revenue comes from data.
So why would anyone want to be tied into a contract for two years? The major handset manufacturers all release updated, newer, faster, more powerful devices much more frequently. Apple and Samsung, the two dominant players in mobile, release a new flagship phone every year like clockwork. Most other OEMs do, as well.
A few examples of how this shift is already happening -
Google has, for the last three years, designed, marketed and sold their own device as part of the Nexus program. They sell it completely unsubsidized (full price) to the public and without a contract. You're free to use it on any carrier you choose, both here in the U.S. and overseas. The current device, the Nexus 4, sells for as little as $299, and by current standards, is among the best, most powerful handsets on the market.
T-Mobile, just this year, revamped their plans and pricing models to eliminate contracts. Customers pay "full price" for the phone with a small down payment and then monthly installment payments thereafter. If you want to leave T-Mobile at any time, you're free to go (of course you have to pay the phone off). This approach is less intimidating to customers and embraces our newer ways of thinking, as well as the speed at which the wireless industry (and related technology) is changing.
If you want the latest and greatest phone, great. If you break the one you've got and need a replacement, no problem. If you get a new job and your employer provides you a phone, you can cancel with no penalty. If you move to an area where T-Mobile doesn't have coverage (or overseas, even), that's not a problem either.
Under this model, you're paying full MSRP for your device, so your carrier has no vested interest in making back that subsidy (discounted phone price they gave you up front) over the span of your contract. If anything, they're even more incentivized to continue maintaining and improving the quality of their network to keep you as a customer, instead of relying on the fact that you're tied into a multi-year contract which forces you to say.