By Sinead Carew
LAS VEGAS Jan 7 Verizon Communications (VZ.N)
CEO Lowell McAdam is open to eliminating subsidies on mobile
phones that sharply reduce the cost of devices to consumers, but
said buyers now preferred paying less in exchange for
longer-term wireless contracts.
Smaller rival T-Mobile USA, a unit of Deutsche Telekom
(DTEGn.DE), has announced a plan to get rid of device subsidies
this year but McAdam said it is not clear this would work for
Verizon and the rest of the U.S. market.
U.S. operators like AT&T Inc (T.N) and Verizon typically pay
handset makers like Apple Inc (AAPL.O) hundreds of dollars for
every phone, so they can offer discounts to customers that in
turn commit to more lucrative service contracts.
"It’s very intriguing. Every carrier has thought about doing
away with subsidies," he told Reuters in an interview at the
Consumer Electronics Show in Las Vegas. But "I don’t think U.S.
consumers are ready to buy an iPhone for $700.”
The 59-year-old chief executive also urged the Federal
Communications Commission to approve several industry mergers
and acquisitions in the pipeline.
T-Mobile USA is currently seeking approval to merge with
smaller rival MetroPCS Communications Inc PCS.N. Sprint Nextel
(S.N) is also looking for approval to sell a 70 percent stake to
Japan's Softbank Corp (9984.T).
(Reporting By Sinead Carew; Editing by Bernard Orr)
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