Verizon executive thinks carriers can slash smartphone subsidies without hurting consumers

Verizon Smartphone Subsidies

We’ve known for a while that carriers have been itching for a chance to ditch smartphone subsidies, but Verizon (VZ) CFO Fran Shammo now expects that smartphone subsidies will decrease naturally over the next two to three years with no added cost to consumers. FierceWireless reports that Shammo on Monday told the the Deutsche Bank 2013 Media, Internet & Telecom Conference that emerging smartphone platforms such as Windows Phone and BlackBerry 10 will lead to increased competition in the market and bring lower priced phones, which will in turn lead to reduced subsidy costs for carriers.

“I’m a believer that over the next two to three years subsidies will start to decrease just because of the ecosystems,” he said.

Shammo added that when Verizon moves to Voice over LTE technology (VoLTE) later this year, the company will begin to offer phones without CDMA chipsets, which should also reduce the overall costs of devices.

Carrier subsidies have been a heavily debated issue in the past few years. The executive revealed that while subsidy costs are a large part of Verizon’s expenses, the model has been successful with consumers for the past 12 years.

T-Mobile will reportedly become the first carrier to veer away from traditional phone subsidiaries later this month. Verizon CEO Lowell McAdams previously said the company “could move to that very quickly” if T-Mobile’s strategy finds success.

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