T-Mobile CMO Doesn’t Like Subsidies, Would Wave His Hand And Wipe Them Out If He Could

We love to pay as little as possible for our Android devices (especially if we’re on a 2-year contract) and will look for any (and every) deal or break we can get. However, while the majority of consumers live off subsidized devices, there are some who believe that mobile carriers who subsidize devices also hurt the mobile industry as a whole. While speaking at the GeekWire Summit in Seattle, Washington, T-Mo Chief Marketing Officer Cole Brodman believes subsidizing phones is a major problem and if he had it his way, would “wave his hand and wipe out subsidies.”

Brodman gives his reasoning for his thoughts and beliefs on subsidies while also talking about T-Mobile’s strengths. He states subsidies “actually distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields.” He also adds “it causes consumers to devalue completely the hardware they are using.” During the same talk at the summit, Brodman took some time to pump up how great T-Mobile is despite not having the iPhone and no plans to sell the device in the near future. He was asked about if T-Mobile can survive without selling the iPhone and here were his thoughts:

“Yes we can. We have fantastic alternate choices. And I think those (Android, Blackberry, Windows) devices — whether it is through the app experiences, through the network experiences or through the devices themselves — do things that rival the iPhone — and in many cases — do them better than the iPhone. So, I absolutely think we can be successful.”

Tell us how you really feel Brodman. What do you all think? Is it time for a subsidy-free future or do you folks prefer having your cheaper phones (while still being locked into multi-year contracts)? Sound off in the Comments section below or in our Forums.

source: GeekWire
via: Engadget

» See more articles by Roy Alugbue


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  • Senfelone

    I left T-Mobil because my phone died and my 2 year contract was almost up, I didn’t want to pay full price for another phone and get locked into another contract during which my phone would significantly devalue. So I switched to Virgin Mobile, and have bought 2 phones on their network, I love having the freedom to switch my phone out whenever it breaks, or a newer/better one is released.

    • Amdivoff

      And that is the reason people pay for a little company called Asurion to replace their phones. Don’t blame a carrier for you dropping your phone a million times and then expect it to work correctly.

      • Senfelone

         lol, actually I bricked it with Cyanogenmod, so totally my fault.

  • Senfelone

    I left T-Mobil because my phone died and my 2 year contract was almost up, I didn’t want to pay full price for another phone and get locked into another contract during which my phone would significantly devalue. So I switched to Virgin Mobile, and have bought 2 phones on their network, I love having the freedom to switch my phone out whenever it breaks, or a newer/better one is released.

  • http://profiles.google.com/blaisepascal Buddha Buck

    I definitely benefit from having subsidized phones — and plan on getting locked into another 2-year contract within the next few months as well.

    However, he’s right.  Phone subsidies do all the bad things he says: distort the markets, makes people not appreciate the cost/value of the phones, and even drives up cell phone plan prices for everyone.

    If the market didn’t subsidize phones, it would be a more transparent, competitive cellular market, which would be good for the market and the consumer in general.  Unfortunately, the reason why T-Mobile still subsidizes phones despite the comments of its CMO is because there are huge risks for going first.

  • Martin

    I think the networks would see declining profits if people had to pay full price for their handsets.  Fewer people would get contracts and fewer people would get smartphones.  Too late to change now anyway.

  • Guest

    So my choices are:
    1.  Spend $200 for the device… and forever pay a huge monthly fee.
    or…
    2.  Spend $700 for the exact same device… and forever pay the exact same huge monthly fee.

    Huh?

    The device it totally useless to me, as soon as I don’t pay the monthly carrier fee.

    I never understood the “2 year contract” or “pay month-by-month” difference.
    You *ALWAYS* have to pay someone the same monthly fee…. either way.

  • Guest

    But we can *ALREADY* pay “full price” or “subsidy price” now.
    Everyone can choose what works best for them.

    T-Mobile wants to forbid everyone from even having a choice, at all???
     

  • Guest

    I wonder what would happen if the device could by simply be switched to Sprint, AT&T, and Verizon… with the click of a button?

    If I happened to be in an area with excellent Verizon coverage… that’s what I would use.
    Other days I could switch to Sprint or AT&T.   (On a day-by-day, or even hour-by-hour basis.)

    If I happened to like Verizon so much… that I would “accidentally” leave my device set to “Verizon” for several days/weeks at a time… that’s fine too.

    At the end of the month… if I used Verizon for 90% of my calls/data… Verizon would get 90% of my monthly fee.   Perfect fair to each of the carriers.

    The carriers would be *FORCED* to fix their networks… and give excellent service.. or their profits would drop off immediately.    No one would use them otherwise.

    Currently, carriers are under no obligation to give excellent service… or even ANY service.  You still pay them anyway.   And are locked to them… for years.

  • Anonymous

    For the time being subsidies are necessary. Phones without them are too expensive, and cheaper options are often too weak, laggy, and unsupported. However maybe 4 or 6 years down the line, when even the low end phones can play back 720p video flawlessly yet only cost $100 or $200 off contract, then it might be viable to remove subsidies, as the higher end smartphones will overall offer little to no visible benefit for the majority of users. The same way netbook cost less, but work just fine for most regular applications.

    Also the FCC needs to regulate and force the carriers to allow any device on their networks, not just the ones they prefer to offer and brand their own. Carriers have no right to lock phones down, and no solid reason for it other than to have control over their customers.

  • http://www.facebook.com/courtois Philip Courtois

    With subsidies, the carriers and handset manufacturers are getting away with an amazing trick that consumers hate to question. Yes, if it’s so lovely having an excuse to get the latest new phone every two years. But once you do the math, it’s obvious that the price of the phone or more is split over the 24 months of service. The biggest issue with that is that after the phone is paid off after 24 months, the phone payments continue, so the only way yo get your money’s worth is to get the new latest and greatest phone. Being locked into this planned obsolescence consumer cycle is bad for the environment, and it allows the price of phones to be set artificially high – because nobody pays the no-contract price outright.