What would you do if you were “king for a day” of the cellphone industry? Cole Brodman, T-Mobile’s CEO, would get rid of device subsidies all together. He says that they hurt the industry and that if he had his way, they would be eliminated all together.
“It actually distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields, and I think it is really difficult, especially from a consumer perspective, because it causes consumers to devalue completely the hardware they are using…. It is amazing hardware, but it has become kind of throw away. So, it is unfortunate, you’ve got dual-core, multiprocessor devices with amazing HD screens that get thrown away at 18 months.”
Brodman was speaking at the GeekWire summit when he expressed these concerns. Interestingly enough, Swipe CEO Mike McSherry reminded Brodman that he is actually a pretty big player in the industry, and that he could get rid of subsidies if he wanted. But Brodman reminded everyone of what they already knew; that T-Mo was just one of the four major players in the industry and that the other three carriers “don’t want to play along.” Personally I can’t imagine this business without subsidies, 2-year contracts would be outrageous if the phone cost $700 each time. Subsidies won’t likely go away anytime soon but what are your thoughts?