Stephenson sees the subsidy writing on the wall

[HeyCori]

AT&T CEO says big phone subsidies might be a thing of the past | BGR

AT&T CEO Randall Stephenson said that carriers need to start thinking about how to get consumers to to sign up for data plans as opposed to how to sell them the newest devices, which is the strategy most carriers in the U.S. are employing right now.

“When you’re growing the business initially, you have to do aggressive device subsidies to get people on the network,” said Stephenson. “But as you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can’t afford to subsidize devices like that.”

Granted he's the CEO of the Death Star but he still has a point. The call to cut the contract is everywhere. T-Mobile fully embraced it which forced AT&T to do the same with their new off-contract pricing. It's only a matter of time before Verizon follows suit. OEMs are doing their part as well, offering good phones for cheap. There are now a multitude of inexpensive phones that are aiding in people's decision to go prepaid. Competition from MNVOs and T-Mobile's aggressive move toward cheaper prices might finally be paying off. I know I recently canceled my contract with AT&T. Never signing another one of those again.

 

[Laura Knotek]

I wonder how the carriers will feel about subsidies if the lack of subsidies means high end devices sit on shelves unsold. This might make the majority of consumers go for only cheap devices.

Sent from my Lumia 900 using Tapatalk

 

[realwarder]

I wonder how the carriers will feel about subsidies if the lack of subsidies means high end devices sit on shelves unsold. This might make the majority of consumers go for only cheap devices.

Sent from my Lumia 900 using Tapatalk

That and the fact that cheap devices are now amazing which makes much less reason to buy an expensive one.

 

[jaj324]

I'm wondering if at&t will announce an end to subsidized phones in advance of ending them or just do it suddenly. The reason I wonder is because I am sitting on an upgrade on 1 of my 4 lines to use for next year's android or wp superphone. I would hate for at&t to change the policy without warning.

As for the high end phones not selling I think that this move by the carriers will have several effects. One is that the price of all phones will come down and you will be able to get more for your money. The price among phones will become much more competitive. Also, I think the manufacturers will start selling more unlocked phones directly to the consumer with no down payment and low monthly payments. Why should they sell them to the carriers at wholesale and let the carriers make the profit. I believe HTC is already selling the One for nothing down and 25 a month for 24 months.

Sent from my Nexus 7 using Tapatalk

 

[palandri]

It works in Europe, but your voice and data rate is greatly reduced when you purchase a phone outright. Plus manufacturers are required to have a 2 year warranty.

 

[jaj324]

It works in Europe, but your voice and data rate is greatly reduced when you purchase a phone outright. Plus manufacturers are required to have a 2 year warranty.

It's coming to the US and probably next year BEFORE the next round of high end phones. If the CEO of at&t is talking about it now and all the carriers already have a payment plan option in place they will not be subsidizing the S5, iPhone 6, Note 4, etc....

Sent from my Nexus 7 using Tapatalk

 

[palandri]

Here are the new AT&T rates: Mobile Phone Plans - Unlimited Talk & Text Mobile Share Plans from AT&T

If you bring your own phone, for $45 you get unlimited talk & text, plus 300MB of data. If you need more data the price shoots up

I was paying $178 after tax for two phones on AT&T with 2GB & 3GB of data.

I switched to T-Mobile and I am paying $118 after tax for two phone, each phone has 2.5GB of data.

So AT&T is getting much more competitive.

 

[thundr51]

I was thinking about switching to ATT but after doing a price comparison this morning, I think I'll stick with Tmo. Currently I have 500min talk/ unlim. text + 5Gb data w/ tethering & insurance + $20 for phone (almost paid off). Currently paying $105 but in about 3 months I'll be paying $85. Sticking with Tmo for now, I'll have to save up for an unlocked 1020.