Verizon CEO Lowell McAdam stopped by CNBC today to talk about the state of the wireless industry and the influx of freebie add-ons from companies like T-Mobile and AT&T. He shared his thoughts on whether or not he feels Verizon needs to offer up something similar. As you probably guessed by that headline, McAdam wasn’t exactly worried about competitors offering free goods when he feels the strength of his own network is what’s most important.
McAdam talked specifically about T-Mobile’s free Netflix and AT&T’s free HBO, suggesting that he could cut a similar deal with someone like Showtime (😂). Verizon’s CEO just doesn’t think that you have to “give something away that has value in order to sell your service.” He suggested that “customers will buy based on their experience” and “not whether they have Netflix or not.”
During the conversation, he also rolled his eyes a bit at all these companies feeling the need to acquire media companies (reminder: Verizon bought both AOL and Yahoo), name-dropped Go90 (😂), and talked briefly about 5G, though not mentioning much other than the vision of a connected world it could fulfill.
We’ve seen this talk before from Verizon, and look, it makes some sense. If your network is the best (and clearly T-Mobile is catching up in many areas), people will stick with you. We run polls pretty regularly on this subject and most people continue to stay with Verizon’s arguably high prices because they feel it gives them the best coverage and service.
The thing is, as I just mentioned, T-Mobile is coming and they are coming quickly. Offering freebies and add-ons like Netflix, which millions upon millions of people subscribe to and would probably love to no longer have to pay for, help you standout. Those items add value. And when you are Verizon and your prices may not scream “value,” yet your competitors aren’t that far off in terms of network while tossing in these extra goods, you might want to care.