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Verizon: Smartphone subsidies and 2-year contracts aren’t going anywhere

on March 10, 2014

Gigaom

The rest of the U.S. mobile industry may be moving away from smartphone subsidies – or at least giving lip service to the idea – but the biggest mobile carrier of them all is standing firm behind the two-year service contract. Speaking at a Deutsche Bank financial conference, Verizon(s vz) CFO Fran Shammo reaffirmed Verizon Wireless’s commitment to the subsidy model, in which a generation of mobile subscribers have exchanged deep discounts on their smartphones for locked-down, expensive service plans.

“We believe that the subsidy model is an extremely good model,” Shammo said in comments first noted by FierceWireless. “It’s done wonders for us in this industry…To abandon that I think is a mistake.”

Many smartphones feature

Most carriers are either racing or walking away from the subsidy model, prompted by the big spike in prepaid plan adoption that started five years ago. T-Mobile(s tmus) was the first nationwide carrier…

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