All eyes are on T-Mobile as the carrier embarks on a new journey that will eliminate its standard cell phone service contracts in favor of a more transparent hardware financing model. U.S. carriers in particular will be watching this story unfold quite closely, and the chief executive of the nation’s top carrier recently said he would happily drop the cell phone contract model if Verizon Wireless subscribers express interest in this new model en masse.
“I’m happy when I see something different tried,” Verizon (VZ) CEO Lowell McAdam told reporters on Wednesday, CNET reported. “We can react quickly to consumers’ shifting needs.” McAdam went on to say that he would follow T-Mobile’s lead if customers showed interest in similar contract-free service options.
T-Mobile’s new model allows customers to purchase a phone for a small up-front fee and then continue to make monthly payments toward the balance. While subscribers no longer need to sign traditional service contracts, they will still be responsible for the full value of the cell phone in the event service is terminated before the handset is fully paid for.