Adam Smith Will Be Smiling.

Well now looks like T-Mobile has started something that can’t be ignored. Verizon Wireless is going to start offering a month to month (MTM) plan for those that want it. You pay the full boat price for the phone and get to go MTM on the service. –

• Available to Consumer, Corporate Liable, and Employee Liable customers (excludes Federal Government customers)
• Any current voice &/or data calling plan and equipment available
• Customer credit checks apply.
• Device Initiation Fee and/or Activation Fee must be charged (no exceptions)
• MTM customers are eligible to accept any applicable promotional offering but must agree with the contract term associated with the offer (i.e. they will no longer be a MTM customer)
• Customers are not eligible for equipment discounts if they do not agree to a one or two-year minimum term
• Corporate and employee liable customers are eligible to receive accessory discounts on month to month agreements
• MTM customers can terminate their service at any time (effective on their next bill cycle date) without incurring an early termination fee
• New Customers: Use Month to Month as the contract term
• Existing Customers: Use Upgrade Reason Code UN only

Well this is great news for a couple of reasons:

1. You pay for the phone at its true cost. TP has been advocating this as if there is mass adoption it will drive down the true cost of the devices.
2. It eliminates contracts. That is beneficial to both parties. You don’t pay your bill you don’t have service. If you can’t follow that then you don’t deserve a cell phone.
3. Eventually if there are enough MTM customers with all the carriers a battle royale will ensue on the transport costs. We could see savage pricing like we do in the wholesale VoIP space.

What I don’t understand is why a credit check on MTM? If the customer uses a credit card to buy the phone and signs up the same account for the monthly billing why does the wireless carrier care? It drives up their costs actually.

We would like to thank The Boy Genius blog for this information.