T-Mobile is planning to move away from the standard US phone subsidy model next year, and its competition are paying attention. The Wall Street Journal is reporting that Verizon Communications CEO Lowell McAdam called T-Mobile's new plan "a great thing" in an interview at CES. Despite his enthusiasm for that change, McAdam questioned whether or not consumers would accept the higher initial phone cost that comes along with the ending of subsidies — phone buyers in the US have now been heavily conditioned to expect cheaper hardware. He did say that Verizon "could move to that very quickly" if people were interested.
AT&T Mobility CEO Ralph de la Vega also said his company was watching T-Mobile's move very closely and hinted that AT&T could adopt the strategy if it became popular, but it wasn't a major area of focus for the company. "Our research says that they [customers] don't like paying upfront for the phone," he said. "There didn't seem to be the appetite for that kind of plan." For its part, T-Mobile believes in its new strategy. "We intend to challenge some the norms in the industry," T-Mobile CMO Michael Sievert told The Wall Street Journal. The company believes that once consumers realize they'll actually save money in the long run, the new plan will be a success.