I think it is one of those options that is going to go away slowly…not because we insist on it but because customers will choose it less often.
I still think this is a fairly long way off. I don’t know many people outside the tech-ish bubble who would even consider it. I support the move, as you know exactly what you’re paying for and when you’re paying for it.
T-Mobile’s already made this shift, factoring an installment cost of the phone into its plan price. When you pay off the phone, your plan gets cheaper. So if you decide to stick with your current phone for a while, you save money. Likewise, if you bring your own phone, you don’t pay the higher rate. If you want to switch to another provider, just pay off the cost of the phone, and you’re free to go—no pesky contracts mucking things up.
AT&T does something similar. I moved Lauren and I both off contract by paying the full price of our phones last year (it’s amazing how stunned the reps at the AT&T store were by this). That move dropped our bill by about $15 per line. Just this month I upgraded us to the 10GB data plan and that upped our discount to $25 per line every month. That clever bit of pricing makes anyone using more than 3GB heavily motivated to move up to the bigger plans. If you use that much data, you can actually save money by paying full price up front and taking advantage of the bigger discount.