Good: AT&T not ending 2-year contracts, only their 3rd party retailers are.

[spacemnspiff]

And AT&T Wireless CEO Ralph de la Vega told Re/Code this week that he thinks all two-year contracts are going to be phased out eventually.

http://money.cnn.com/2015/06/03/technology/200-dollar-iphone/index.html
http://recode.net/2015/06/02/atts-ralph-de-la-vega-subsidized-phones-are-going-away/

 

[aneftp]

I'd like to see once the central banks start raising interest rates to say 5% (prime lending rates would be around 8% to consumers). Let's see if carriers will be as generous with their 0% financing for $500-800 phones over 2 years.

The money crunchers will decide how much money they are losing with free financing.

Right now the lending rate is extremely low cause the central bank rates are close to 0%.

 

[C DM]

I'd like to see once the central banks start raising interest rates to say 5% (prime lending rates would be around 8% to consumers). Let's see if carriers will be as generous with their 0% financing for $500-800 phones over 2 years.

The money crunchers will decide how much money they are losing with free financing.

Right now the lending rate is extremely low cause the central bank rates are close to 0%.

It's not just that, it's also their way of doing something similar to what a contract does and "lock" people into staying with their service for a number of months (essentially around the same period that the contracts would do it).

 

[JayIsAwesome]

You are exactly right. I work for a large preferred retailer for Sprint and we no longer offer 2 year contracts in store. Those customers that have to have a 2 year contract have to go to sprint.com to get 2 year pricing. That will soon end, and Sprint will only offer installment billing of devices, or full retail. All carriers are doing away with 2 year contracts. I'd say in a year or less, lease, edge, next, etc will be the only option other than BYOD or full retail.

Installment billing of devices makes the carriers so much more money. The customer is essentially paying full retail for their device AND they are more or less still committed for 2 years. It's a cash cow for the carriers.

Agreed. I'm gonna get so much crap from customers, who are mad that the 2yr contract pricing is ending. I know it sucks. Hell I even told my reps from AT&T and Sprint that it sucks. Does installment billing work for some? Tbh, it does. But for others, not so much. It sucks that many customers are basically being forced to do this. Or buy the phone full price.

 

[aneftp]

It's not just that, it's also their way of doing something similar to what a contract does and "lock" people into staying with their service for a number of months (essentially around the same period that the contracts would do it).

That very true. A monthly installment plan rarely gets paid in full ahead of time especially if it's no interest.

 

[grifftaur]

Wondering too. I would like to order from Apple but have the Next plan at the moment. I wonder if I will be able to order my replacement though the app and it will deal with the current Next phone plan. I assume I turn in my current phone sometime later but don't know for sure. My plan is to swap my current device for the next device as part of my Next 12. I thought about paying my phone off and keeping it but just not sure what to do with an extra 6+. I like the size but its too big for those in my house. Sell it maybe? Anyhow, off topic for a minute, back on now.

Honestly, I think you're better off paying it off fully and selling it on Ebay. I bet you could get way more than what AT&T will give you. I don't know what the number is, but you have to have a certain amount paid off before being able to trade it in.

 

[aneftp]

Honestly, I think you're better off paying it off fully and selling it on Ebay. I bet you could get way more than what AT&T will give you. I don't know what the number is, but you have to have a certain amount paid off before being able to trade it in.

It really depends on the phone/trade in/eBay/at&t next.

Say I purchased Lg G3 at&t next for $599. Next 12. So after 12 months I paid$360 (12 $30 installments).

So I owe $240 on the lg G3. Look at eBay listings for G3. Many go for around $300. So factor in eBay fees plus pay pal fee, I may be netting $270 on eBay (plus risks of fake buyer/scams etc).

So AT&T will allow me to trade in G3 for new phone next month. So the $240 vs $270 spread difference is too much. I'd rather deal with AT&T and official trade in with AT&T next for new phone. Than try to get another $30, maybe $50 extra on Craigslist.

Android phones have lower reseller value do at&t next may be better or easier way of trading in phones.

 

[jca24]

This is just phase 1.
Phase 2-By the end of the year all new 2yr contracts will be done away with, regardless of where you get your phone.
Also, the grand-daddied unlimited plans will be be no more.
p.s. don't say they can't do that, because they can, they can do whatever they want.
Bank on it.

 

[bpeeps]

This is just phase 1.
Phase 2-By the end of the year all new 2yr contracts will be done away with, regardless of where you get your phone.
Also, the grand-daddied unlimited plans will be be no more.
p.s. don't say they can't do that, because they can, they can do whatever they want.
Bank on it.

Someone has said unlimited plans will be eliminated every year since ATT got rid of the option. While I do agree 2 year contracts will shortly be gone for all carriers. ATT has yet to state whether the option of grandfathered unlimited will be removed or not. Until they force me off of it, I'm not changing a thing.

Mostly what pisses me off about ATT, is they have not issued anything close to a similar data plan. I only use around 3 - 5gb of data a month. Yet their 6gb is ridiculously overpriced and their 3gb just isn't enough for me some months.

 

[Bananas Ananas]

I just recently moved to the United States and never really understood those 2 year contracts as they seem ridiculously expensive. How could I possible be better off with a contract than buying the phone unlocked and using T-Mobile's $30/month plan?

2 year total cost for 16gb iPhone 6:
$649 + $720 = $1369

 

[aneftp]

I just recently moved to the United States and never really understood those 2 year contracts as they seem ridiculously expensive. How could I possible be better off with a contract than buying the phone unlocked and using T-Mobile's $30/month plan?

2 year total cost for 16gb iPhone 6:
$649 + $720 = $1369

What non USA people fail to realize was during the cell phone carrier "race to the top" period of around 2002-2009 where USA carriers were only interested in "subscriber growth". Investors in these companies only looked at how many "subs" each carrier had.

So when Verizon hit 50 million subs it was a big thing. When Cingular purchased AT&T wireless and jumped Verizon in "subscribers" it was a big thing.

But you want to know how they increased subscribers? Easy. Carriers only real way of increasing number of subscribers (post paid on 2 year contracts) was through "family plans". What this meant was each line added to an account was $10. So the more lines added to an account the better the carrier looked. And it was also cheaper for the consumer. Since first line was usually $50-70. Second line $10, third line $10. And so on. Up to 5 lines. So the average cost per line for consumer went down with more lines added.

Investors loved to see AT&T/Verizon adding "more lines". That indicated "growth". This was all fine and dandy.

Consumers basically just purchased flip phones on these $10 add a lines. It didn't cost the carriers much to have these 2 year contracts. Consumers just paid say $0 or maybe $50 for these flip phones on 2 year contracts (flip phones cost carriers maybe $150-200). So carriers didn't really care. They were only "subsidizing lines 2-5" and barely making a profit. Line 1 always made a big profit. But investors were happy carriers were adding lines.

Than came the iPhone. Specifically the subsidy of iPhones. It "changed everything". You see subsidizing line 1 (which paid the most) was ok to carriers. But when consumers were only being charged $10 for line 2. But say AT&T was "subsidizing line 2 $400" over 2 years. The subsidy of lines 2-5 became intolerable for carriers. Especially for savvy consumers like me who would just add a line for $10 and just resell the iPhone.

Think about it. $10 add a line x24 months plus taxes (but i got 24% discount). So it only cost me $240 to add a line over 2 years. I got a $599 iPhone (apple raised iPhone prices to $650 in 2011). I paid $200 for subsidized iPhone. $200 plus $240 for 2 years. So my add a line strategy cost me $440. But cost AT&T $600 for the phone. So I was making $160 every 2 year off the carriers. (AT&T sprint Verizon do not require data plans previously on lines you don't carry smartphones).

Carriers profit margins eroded quickly with these subsidy especially when they couldn't get me to pay for data either since i sold these iPhones on my spare $10 lines.

 

[AJsAWiz]

I'd happily pay the full retail price of an iPhone to keep unlimited--especially now that AT&T has relaxed their throttling policies. In fact, I was ready to do just that when the iPhone 6s was released. AT&T charges $375 for 50GB of data and I pay $30 for unlimited. Clearly, these are incredible savings for someone who uses a lot of data and let's face it--people are using more and more as features become more data hungry. I remember people saying that 1GB was way too much. . .



I'm wondering though if AT&T would consider Apple a "third party"? Remember, we are talking about the contract plan not the iPhone itself. Hope that's not the case though.

Now that's a good question! I would like to see an answer to that one. I would like the choice of getting my next iPhone from either Apple or AT&T with the ability to "renew" my 2 year contract so I can get the subsidy and keep my unlimited data plan.

 

[AJsAWiz]

Yes. Apple is third party.

Only official ATT stores and official ATT online offer 2 year contracts now.

Now that just sucks bullets

 

[cousintim]

Phase 2-By the end of the year all new 2yr contracts will be done away with, regardless of where you get your phone.
Also, the grand-daddied unlimited plans will be be no more.
p.s. don't say they can't do that, because they can, they can do whatever they want.
Bank on it.

BS on it.

AT&T's goal is managing its customer mix. It is very happy with its successful strategy to migrate more customers to Next and reduce subsidies. It also continues to believe that two-year contracts are a valuable tool to attract and retain customers. If it wanted to eliminate them, they would be gone. It doesn't. It wants more control of the customer so it is limiting two-year contracts to its direct channel.

Likewise with unlimited data. It has reduced those customers at an even better rate than planned and continues to do so. It sees no need to eliminate (and disrupt) a customer segment that is naturally shrinking.

And, just to be clear, AT&T is quite satisfied with its National Account program and FAN discounts.

 

[maflynn]

http://www.theverge.com/2015/5/19/8625985/attt-two-year-contract


Good news for those of us on grandfathered family plans

From what I've read and seen, like the age of the dinosaur, the age of subsidized phones is coming to an end (just not as spectacular as the dinosaur's demise ).

Apple is not longer providing the option and maybe you can still get a subsidized phone at an ATT store, I'm sure they'll be pushing you for the next program. I suspect when my contract ends in 2016, I'll not have the opportunity to by the iPhone 7 on subsidy.

 

[Bananas Ananas]

What non USA people fail to realize was during the cell phone carrier "race to the top" period of around 2002-2009 where USA carriers were only interested in "subscriber growth". Investors in these companies only looked at how many "subs" each carrier had.

So when Verizon hit 50 million subs it was a big thing. When Cingular purchased AT&T wireless and jumped Verizon in "subscribers" it was a big thing.

But you want to know how they increased subscribers? Easy. Carriers only real way of increasing number of subscribers (post paid on 2 year contracts) was through "family plans". What this meant was each line added to an account was $10. So the more lines added to an account the better the carrier looked. And it was also cheaper for the consumer. Since first line was usually $50-70. Second line $10, third line $10. And so on. Up to 5 lines. So the average cost per line for consumer went down with more lines added.

Investors loved to see AT&T/Verizon adding "more lines". That indicated "growth". This was all fine and dandy.

Consumers basically just purchased flip phones on these $10 add a lines. It didn't cost the carriers much to have these 2 year contracts. Consumers just paid say $0 or maybe $50 for these flip phones on 2 year contracts (flip phones cost carriers maybe $150-200). So carriers didn't really care. They were only "subsidizing lines 2-5" and barely making a profit. Line 1 always made a big profit. But investors were happy carriers were adding lines.

Than came the iPhone. Specifically the subsidy of iPhones. It "changed everything". You see subsidizing line 1 (which paid the most) was ok to carriers. But when consumers were only being charged $10 for line 2. But say AT&T was "subsidizing line 2 $400" over 2 years. The subsidy of lines 2-5 became intolerable for carriers. Especially for savvy consumers like me who would just add a line for $10 and just resell the iPhone.

Think about it. $10 add a line x24 months plus taxes (but i got 24% discount). So it only cost me $240 to add a line over 2 years. I got a $599 iPhone (apple raised iPhone prices to $650 in 2011). I paid $200 for subsidized iPhone. $200 plus $240 for 2 years. So my add a line strategy cost me $440. But cost AT&T $600 for the phone. So I was making $160 every 2 year off the carriers. (AT&T sprint Verizon do not require data plans previously on lines you don't carry smartphones).

Carriers profit margins eroded quickly with these subsidy especially when they couldn't get me to pay for data either since i sold these iPhones on my spare $10 lines.

Wow! This post includes by far the most information on the subject I could've ever found. Thank you very much for this information–now the existence of such contracts makes a little bit more sense.

 

[grifftaur]

It really depends on the phone/trade in/eBay/at&t next.

Say I purchased Lg G3 at&t next for $599. Next 12. So after 12 months I paid$360 (12 $30 installments).

So I owe $240 on the lg G3. Look at eBay listings for G3. Many go for around $300. So factor in eBay fees plus pay pal fee, I may be netting $270 on eBay (plus risks of fake buyer/scams etc).

So AT&T will allow me to trade in G3 for new phone next month. So the $240 vs $270 spread difference is too much. I'd rather deal with AT&T and official trade in with AT&T next for new phone. Than try to get another $30, maybe $50 extra on Craigslist.

Android phones have lower reseller value do at&t next may be better or easier way of trading in phones.

OP has the option to sell on Craigslist or Swappa where he would take more of the money. Ebay wouldn't be the only option.

 

[DarrenStevens]

Now that's a good question! I would like to see an answer to that one. I would like the choice of getting my next iPhone from either Apple or AT&T with the ability to "renew" my 2 year contract so I can get the subsidy and keep my unlimited data plan.

Well that option is gone. You can get a subsidized phone only through AT&T now. Soon you won't be able to do even that. Then once all of the UDP lines are off contract, AT&T will eliminate UDP.

 

[AZhappyjack]

Well that option is gone. You can get a subsidized phone only through AT&T now. Soon you won't be able to do even that. Then once all of the UDP lines are off contract, AT&T will eliminate UDP.

I just switched to the MobileShare plan with 30gb (15gb plan with double data), saved $10/month. For my 5 line family shared plan, 30gb is pretty close to unlimited.

 

[DarrenStevens]

I just switched to the MobileShare plan with 30gb (15gb plan with double data), saved $10/month. For my 5 line family shared plan, 30gb is pretty close to unlimited.

I am on Verizon and I use 30GB by mid billing cycle on my line only.

 

[erayser]

I just switched to the MobileShare plan with 30gb (15gb plan with double data), saved $10/month. For my 5 line family shared plan, 30gb is pretty close to unlimited.

I'm at 19gb exactly 2 weeks into my billing cycle. 4 people in your shared plan would be very unhappy with me.

 

[macher]

I just switched to the MobileShare plan with 30gb (15gb plan with double data), saved $10/month. For my 5 line family shared plan, 30gb is pretty close to unlimited.

$10 savings isn't significant for me unless I needed to tether.

 

[aneftp]

OP has the option to sell on Craigslist or Swappa where he would take more of the money. Ebay wouldn't be the only option.

I said in my post they could make an extra $30-50 on Craigslist.

 

[imlynxy]

I just switched to the MobileShare plan with 30gb (15gb plan with double data), saved $10/month. For my 5 line family shared plan, 30gb is pretty close to unlimited.

30Gb is not even close to unlimited.

 

[AZhappyjack]

30Gb is not even close to unlimited.

Do none of you ever even consider wifi? I have wifi at home, wifi at work, wifi many places I visit. I even have wifi at church. For my family, 30gb is more than enough. Obviously, YMMV.