In March, T-Mobile (NASDAQ:TMUS) rocked the telecom sector and became the first major wireless carrier to do away with smartphone subsidies, even though it did so under the veil of freeing customers from the burden of contracts. Since the announcement, rumors have begun to circulate that Verizon (NYSE:VZ) is considering following suit. If Verizon drops subsidies, it's likely that AT&T (NYSE:T) will do so, as well, and the rest of the telecom sector could follow suit.
In the video below, Fool.com contributor Doug Ehrman discusses how the end of subsidies will impact the telecom sector, specifically companies like Apple (NASDAQ:AAPL), which rely on a rapid upgrade cycle to push unit sales.
Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.