Two-year contracts have long been bundled with our smartphone purchases. It took quite a bold move from T-mobile, with their Uncarrier movement, to shake things up and question how things are done. One of these things was buying a phone with a contract or full price.
The realization did make an impact on the industry. Customers were realizing how much phones really cost and the disadvantages in contracts.
Re/code recently had a discussion with AT&T CEO Ralph de la Vega about this shift. AT&T has begun embracing it, offering customers the option to pay full price for their smartphones through financing.
Regarding the contract practice, Ralph de la Vega told Re/code “I think it is one of those options that is going to go away slowly”. However, it seems like the change will be driven by the customers rather than the carriers’s push, as he says “not because we insist on it but because customers will choose it less often.”
This approach differs from T-mobile’s aggressive strategy dropping the subsidized-ways all together. We will have to wait and see what becomes of it.
[blockquote author=”AT&T CEO Ralph de la Vega”]We need to give it a little more time[/blockquote]