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Verizon CFO: Phone Subsidy Model Is 'Extremely Good'

March 11, 2014 - News

**Editor's Note: Which is America's top wireless network? Click here to see what we discovered.**

Phone subsidies remain the safe option for Verizon Wireless.

That's the takeaway from Verizon CFO Fran Shammo's presentation this week at a Deutsche Bank conference.

In addition to subsidies, Verizon offers subscribers the ability to pay for their pricey devices on monthly installment plans, but that option is available only to "very high credit-worthy customers," Shammo said, according to CNET.

That's because installment plans are risky for carriers. For example, subscribers can give back a phone instead of paying it off, and the carrier doesn't even get the benefit of the early termination fee.

Given the risks, Verizon sees subsidies as best.

"We believe that the subsidy model is an extremely good model," Shammo said, according to CNET. "It has done wonders for us in this industry. So I think to abandon that I think is a mistake."

Wireless rivals AT&T and T-Mobile offer the much-publicized "Next" and "Jump" programs, respectively, which let subscribers upgrade almost whenever they want. Verizon's answer to those initiatives is "Edge."

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