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T-Mobile’s dynamic shift away from the subsidy model of the US wireless industry is definitely raising eyebrows. We’ve already heard from the heads of AT&T and Verizon, both of whom have stated they are closely watching the reaction to T-Mobile’s efforts. AT&T’s CEO feelings have been shared by the likes of Telefonica and Vodafone in Spain lending more credit to the idea that T-Mobile’s move may offer more risk than reward.
Still, while the heads of the other carriers may be throwing up caution warnings, handset makers and platforms are not worried about their relationship with T-Mobile. RIM CMO Frank Boulben, told Fierce Wireless that he isn’t worried about the company’s move.
“We can live with all the models because fundamentally it’s driven by what the end user wants,” he said.
For its part, Microsoft’s senior product manager of Windows Phone, Greg Sullivan says the move is a reflection of a healthy industry.
“I think it’s a recognition that the market is not homogeneous and that there’s room for different business models and approaches, and we’re encouraged that they are exploring these new models…It’s a reflection that this is a really healthy, dynamic industry.”
In fact, as Fierce Wireless editor Phil Goldstein points out, the subsidy model is actually a reflection of the unhealthy state of the industry. Unfortunately, as Zhao Wei, vice president of ZTE’s US handset business points out, while T-Mobile’s move may be “brave,” US wireless customers “are familiar with subsidies.”
There’s little doubt T-Mobile has an uphill marketing battle ahead of them to drive home their point that the subsidy model is bad for the consumer, bad for the company and bad for the industry. Thankfully, T-Mobile’s CEO John Legere seems more than up to the challenge.