Two weeks ago T-Mobile shook up the cellular phone world by announcing that it was doing away with lengthy contracts for its users. Users who choose to switch service providers will also not face steep fees for dropping T-Mobile service. By comparison, Verizon’s customers switching providers can expect to face a fee up to $350 for ending their contracts early.
In response, Lowell McAdam, Verizon’s CEO has indicated that he would be open to making similar changes to Verizon’s business model if their customers were in support of such a change. He indicated that this sort of shift in direction is actually fairly simple. He said in a report “[I’m] happy when I see something different being tried.”
If the efforts of a blogger from Wichita, Kansas gain the recognition that they seem poised to do McAdam’s words may well be put to the test. Mike Beauchamp said he started his campaign after hearing McAdam’s position on Verizon’s contract model. He took his displeasure with Verizon’s model to Change.org and started a petition calling for the provider to do away with contracts and establish a better program by which consumers can purchase their cellular devices. As of today, less than two weeks after Beauchamp started his petition, it has received over 58,000 signatures.
Beauchamp told CNN that he believes “people should have the freedom of choice … to move freely between carriers.” He feels that it’s time that Verizon moves forward with the times. “I think that model where you tie customers in for two or three years is a tired model that doesn’t need to exist anymore,” he said.
The reason cellular service providers started and have clung to the model of getting customers to commit to multiple years of was to help subsidize the high cost of the smartphone devices themselves. Some of the devices carry sticker prices of $600 or more. The T-Mobile new model will call for customers to pay for their devices upfront or via monthly payments. It is the hope of Beauchamp that Verizon will consider a similar focus in revamping their contract system.
When Verizon was contacted in regards to the petition, the spokesperson chose not to address it specifically. Instead Verizon spokesperson Debra Lewis said “Verizon Wireless has for years offered many different choices for customers, including contract plans or month-to-month plans that do not require a contract,” in a prepared statement.
While Verizon does offer some options for service without a contract (much the same as other providers like AT&T and Sprint), the prices are higher than what Beauchamp thinks are necessary. It is his hope that Verizon will agree to get rid of their early termination charges and reduce the cost of devices sold without contracts. Beauchamp said that he has, as yet, not heard from Verizon regarding his petition.