Verizon pricing for shared plan won't change, CFO says

Fran Shammo says Verizon Wireless has looked at taking a path similar to T-Mobile's phone pricing "a number of times," but giving users more options for buying devices won't affect pricing on shared plans.

The Verizon Wireless store in South Arlington, Texas. Verizon Wireless

Verizon Wireless may be looking at new phone pricing options, but that won't affect service plan pricing, Verizon's financial chief said Tuesday.

Fran Shammo, speaking at the J.P. Morgan tech conference, said the company has looked at T-Mobile's new phone and service plan options "a number of times," but Verizon won't change the service pricing on its "Share Everything" plans.

"We may give users more options to buy phones, but it won't affect the service pricing," he said.

T-Mobile earlier this year killed its contract plans and subsidies for phones as part of its "Uncarrier" campaign. Under the new plans, consumers pay the full price for their smartphones through an upfront fee and monthly payment, but they pay a lower monthly rate for cellular service, ultimately saving money. One of the biggest changes is that T-Mobile no longer requires customers to sign a contract for service.

The move is a big change from the traditional U.S. wireless market. Carriers have long offered subsidized smartphones to customers under two-year contracts. However, T-Mobile is attempting to bring some visibility in the process by separating the phone and service costs into two different fees.

Verizon Wireless, by comparison, continues to offer subsidized phones to customers along with its "Share Everything" plans that allow for unlimited phone calls and text messages along with a bucket of data that can be shared by several devices. The company has said it would consider getting rid of contracts if customers demanded it.

Shammo on Tuesday noted that new smartphones are "extremely expensive" and have high subsidy costs for carriers. That's why the company extended the upgrade period for phones to 24 months from 20 months. Shammo said the two-year cycle "works for us and consumers."

 

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