While no-contract options are becoming more and more prevalent these days, it seems the subsidy (contract) route is not going away just yet. In this case we are seeing comments from Verizon CFO Fran Shammo, who touched on how the “subsidy model is an extremely good model.”
Shammo then went on to talk about how it would be a mistake to abandon the subsidy model. To that point, it was said the subsidy model has “done wonders for this industry.” But even though Verizon may continue focusing on the subsidy model in the future, Shammo did acknowledge how some customers prefer the installment plan, which for Verizon — is the Edge program.
It seems part of the push for the subsidy (contract) route deals with risk. Shammo touched on how “there is a lot of risk with the installment sale that has to be monitored.” It was said that Verizon wants to continue offering all options for customers, but that Edge program customers will need to be ranked “very high” in terms of credit worthiness.
We aren’t sure anyone was expecting Verizon to begin pushing the subsidy (contract) route to the side just yet. But at the same time, it is interesting to hear why they are still so ready to push people towards the two-year agreement — a simple matter of lowering the risk on the carrier. Otherwise, in some other recent Verizon news, the carrier introduced the “More Everything” plans and also refreshed the prepaid lineup as the ALLSET PLANS.