"Unsubsidized" Phones Actually Would Change Very Little for End Users, Lots for Carrier Advertising

In many ways, the discussion about whether major service providers are better off selling only

non-subsidized phones misses the point. If a carrier allows subscribers to buy on installment plans, out of pocket costs of service might not change much.

The hit to operating earnings likewise might not change very much. What would change is the “headline” price for a monthly mobile service, which presumably could be lower by the amount of the avoided amortization of the smart phone “purchase.”

In reality, most consumers would still continue to pay the installment fee, so the consumer’s out of pocket expense might not change much, if at all. But the advertised headline price might be low enough to prevent some users from downgrading from a postpaid account to a prepaid account, probably provided by a rival supplier.

Verizon Wireless is not opposed to the idea of separating headline recurring service costs from any forms of consumer device purchases. Even if such changes did not really affect end user out of pocket recurring costs very much, the policies still would allow Verizon to advertise “lower prices.”