April 23, 2013
Kansas Man Wants To Kill Verizon’s Contracts
When T-Mobile finally reached terms to sell the iPhone, they knew they had to do something to set themselves apart to bring customers from other carriers to the Pink side. After all, early adopters are only a few months into new two-year contracts and the rest of the iPhone faithful are likely waiting for the iPhone 5S before they revisit their contracts again. There’s one sure-fire way to romance these customers, of course; promise them cheap plans without a contract.
It’s too early to tell how many customers are ditching AT&T, Sprint or Verizon for T-Mobile, (the “uncarrier” did say opening day for the T-Mo iPhone was “gangbusters”) but it appears their willingness to eschew contracts has caused some customers on other carriers to rise up and revolt.
Mike Beauchamp is a blogger from Wichita, Kansas and a longtime Verizon customer. He started an online petition over two weeks ago calling for Verizon to kill their contracts, allowing customers to pay full price for their devices and leave the service amicably whenever they decide to.
It seemed like a long shot at first, but now the petition is picking up steam and earning a lot of attention. At the time of this writing, it’s earned over 117,000 signatures.
Beauchamp says Verizon CEO Lowell McAdam has expressed his willingness to do away with contracts if there was enough customer interest to do so. “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,” writes Beauchamp.
There are essentially two reasons why carriers make their customers sign contracts. First, they’re used to make sure they get their money from subsidizing their devices. In case you haven’t heard, iPhones don’t really cost $99…they’re more like $649. If Verizon gets you on the hook for two years, they can charge you $100 up front and take the rest out of your pocket for the next 24 months. It’s not an unfair setup, just one that people are accustomed to.
Second, carriers see these contracts as solid, stable money. It’s the same reason people buy rent houses. They have to pay to maintain the thing and every now and then put up with a bad tenant, but when things work as they should, they only have to pick up a paycheck every month. Once that house is paid off, they’re earning nothing but profit. It’s a money making machine.
But this is nothing new…carriers have been offering contracts for many, many years and we’re all used to it.
Beauchamp makes a solid point, however. These contracts are no longer a necessity now that most customers are aware of the true cost of their devices. Google has been selling their Nexus devices straight to the public for years, demonstrating that those who want these devices badly enough are willing to pay for them. Apple also sells their iPhones “unlocked,” meaning customers can take them to nearly any carrier they want. Yet even those who bring their own device, which they’ve paid for themselves sans-subsidy, are still tied down to those contracts and paying the same price as those who snag a $99 phone each time their contract is up.
As a Verizon customer, I’m all in favor of at least having the option to go contract-less. Verizon is the most expensive carrier out there, sure, but you also get what you pay for, and while I’m not a fan of being tied down to a two-year commitment to them, I’ve had very few problems with their network and even fewer issues with their customer service. I’m happy there.
Though I’m in favor of discarding the contracts, I don’t think a complete dismissal is the way to go. After all, the tech heads and gadget fetishists of the world have no qualms with saving their pennies to pay full price for their devices.
We are in the minority.
If Verizon were to completely disband contracts and insist customers pay full price for a phone, they could alienate many who just want to pay $50 for a dumbphone that works only as a phone.
Anything else is considered “fancy” and therefore frivolous.
In the time it’s taken me to write this, 500 more people have signed the petition. Perhaps we’ll one day soon see a no-contract plan from Verizon?
If so, sign me up.
Image Credit: Photos.com