Underdogs Tend to Innovate, Will T-Mobile USA Do So?

If Cole Brodman, Chief Marketing Officer, T-Mobile USA had his way, mobile service providers would not offer, or need to support, device subsidies. Most mobile executives probably would agree, as the growing wholesale cost of the latest smart phones has begun to impose a big penalty on operating income and profit margins.


Consumers obviously like paying $200 for devices that actually cost $500 to $600 each. But the device subsidies obviously represent a sort of inventory cost for the mobile service providers who are subsidizing the devices. 


T-Mobile USA would prefer to operate the way prepaid mobile service providers do, namely by eschewing subsidies. The downside for consumers is the potentially steep cost of their favored devices. 


Unlike the dominant mobile providers in the U.S. market, T-Mobile does support "bring your own device" plans, where consumers have financial incentives to forego the subsidies.


Underdogs tend to drive innovation in most markets, because they have to. The issue now is what else T-Mobile USA might be able to do in that regard