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AT&T CEO: Carriers Can't Afford Big Subsidies for Devices Any Longer
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That's news to me. Neither in the UK nor in Germany (that's the two countries where I would know about it) are telecom companies subsidised by the state. The difference is much stronger competition, and the denser population probably helps a bit because some of the cost depends on the area that is covered by phone service.
AT&T only made over 7,000,000,000.00 in profit last year. I guess this isn't enough.
The price of the phone is obviously included in the monthly payments. And they're making a profit. I don't see the problem.
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Not sure if serious. But you are already paying the $700.
The price of the phone is obviously included in the monthly payments. And they're making a profit. I don't see the problem.
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Not sure if serious. But you are already paying the $700.
If true, how does ATT avoid getting smoked by T-Mobile? The gap in monthly price would be huge.
Dude! No one is forcing you to buy it. period. You should both stop bitching and realize that we choose to be Apple's customers. If you don't like it, don't buy it. Nothing else to say here.
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Mr. Stephenson's duty is to his shareholders. He will keep prices as high as he can for as long as the market will tolerate it. The fractured and unregulated nature of the US telecom industry allows the big providers an advantage that doesn't exist elsewhere in the world. If you want this to change, you have a choice. Contact your congressperson. Or buy shares of AT&T.
Oh no, I've seen far worse, but this one is pretty funny.
It's amazing how many people just read the title and subsequently complained about the pricing not changing, and how it would be great if out of contract phone plans were reduced by $15-20.
I'm starting to think that they wrote the PR this way knowing people would indirectly spread the word about AT&T's new "deal" by complaining and getting corrected dozens of times.
Or maybe I just need to get a cup of coffee.
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Check your phone bill. You're paying telecom taxes.
Just because something is taxed doesn't mean it isn't also subsidized by the government.
Yes, it really makes that little sense.
It's criminal what they charge for minutes and texting. Texting especially is virtually zero data usage. I'm just glad I live in europe where I get more, faster, service for less than half the cost.
It's ironic that in the free-market US, phone plans are super expensive.
In Europe, where the government/EU puts downward pressure on prices, plans are cheaper!
But this won't stop Americans from thinking that free market capitalism is good. It's all hidden behind a supposedly competitive market which is in fact not competitive.
From a selfish point of view I would love that subsidies would be phase out (or reduced) as this model keeps Apple from even trying to compete with Android phones on something somewhat related with price.
I think it would also benefit US consumers. At the end of every two years it seams to me that you are paying much more that it would be advisable.
I like my iPhone and really love my iPad but it's really difficult justifying 700/800 on a iP5s (or whatever the current model may be at the time) compared with Nexus Androids or mid range Androids.
Where I live 4play plans are all the rave nowadays. For 60/month I get FTTH 100/20 , TV with 100 channels or whatever and a DVR set top box, free fixed phone and 2 SIM cards with 2000 minutes/2000 SMSs/200 MBs per month. I could pay a bit more for more wireless data but that's ok.
I think it would also benefit US consumers. At the end of every two years it seams to me that you are paying much more that it would be advisable.
I like my iPhone and really love my iPad but it's really difficult justifying 700/800 on a iP5s (or whatever the current model may be at the time) compared with Nexus Androids or mid range Androids.
Where I live 4play plans are all the rave nowadays. For 60/month I get FTTH 100/20 , TV with 100 channels or whatever and a DVR set top box, free fixed phone and 2 SIM cards with 2000 minutes/2000 SMSs/200 MBs per month. I could pay a bit more for more wireless data but that's ok.
I think you missed my point. Governments all over the world subsidize their information technology infrastructures. You can see some of that on your itemized phone bill. I didn't mean to imply that taxes mirror government subsidies on a 1:1 basis.
meanwhile stephenson drives around in his bugatti veyron 13.7 supercharged
all jokes aside, If AT&T is seriously considering this, I will stay on VZW instead of going back to AT&T. and if VZW is doing it too, I'll go to sprint or t-mobile.
all jokes aside, If AT&T is seriously considering this, I will stay on VZW instead of going back to AT&T. and if VZW is doing it too, I'll go to sprint or t-mobile.
THIS x 1000! That is my huge argument about paying a bs "upgrade" fee. They say it's because they subsidized my phone... I say I signed a 2 year contract for that subsidy....... My point was ok... I'll buy my phone and you lower my monthly price.... oh no we can't do that.
Yep, I'll surely pay full price for my phone when you lower my bill.
AT&T seem to be too comfortable and demanding even more profits. They offer subsidies to get/keep customers.
The real problem here, is that AT&T is testing the waters for the entire industry dropping subsidies. Boom. No more subsidies.
Methinks Samsung has come up with a better deal than subsidies for the Carriers, leading Carriers to apply pressure to drop subsidies altogether. Kick-backs? Who knows what?
AT&T/carriers seem to be making so much money, that they feel they can change the rules, back in their favour. Apple changed their business model, but enough ordinary customers must be buying smart phones now, that the industry wants to re-assert control again.
Best of luck everybody squeal now, or things are going to get really bad, really fast.
The real problem here, is that AT&T is testing the waters for the entire industry dropping subsidies. Boom. No more subsidies.
Methinks Samsung has come up with a better deal than subsidies for the Carriers, leading Carriers to apply pressure to drop subsidies altogether. Kick-backs? Who knows what?
AT&T/carriers seem to be making so much money, that they feel they can change the rules, back in their favour. Apple changed their business model, but enough ordinary customers must be buying smart phones now, that the industry wants to re-assert control again.
Best of luck everybody squeal now, or things are going to get really bad, really fast.
Australia here,
$85 is more than double what we pay for unlimited talk, txt and 5gb data per month with no contract.
The fact that you are paying more than that now or that you think this is cheap boggles the mind.
If you paid $200 for the phone, and are paying an additional $45 a month over two years (compared to the $40 we pay here) then your iPhone cost you $1280 compared to buying it outright and having a reasonably priced plan like we have here.
But then, that's assuming you pay $85mth now. If you pay more than that then every dollar over the 85 per month is another $24 you are paying for the phone over a 2 year contract.
That is just insanity.
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With a $7.2billion profit last year it's obvious AT&T can't afford it. :-/
I hate these companies... All of them.
I hate these companies... All of them.
If they even out the $90 discrepancy between their new discounted plans and the cost of an unsubsidized iphone (Shocker: AT&T comes out $90 ahead), I would very much prefer the pay up front model. For a device I literally have within arm's reach 24/7 and use more than anything else I own, I think I can manage to save up another $450....and that means I can upgrade whenever I want!
That model should also drive the price of phones down...Apple may even have to take a hit on their exorbitant mark-up. Anyone who thinks it would hurt R&D is a fool: phones are a hyper-competitive market - Apple can't afford to cut corners to cut costs, and their ridiculous cash surplus proves they can afford it.
That model should also drive the price of phones down...Apple may even have to take a hit on their exorbitant mark-up. Anyone who thinks it would hurt R&D is a fool: phones are a hyper-competitive market - Apple can't afford to cut corners to cut costs, and their ridiculous cash surplus proves they can afford it.
I have a SIM only contract with O2 also, but they were also running a sale where you got 270 Euro off any phone so I got an new unlocked phone and a SIM contract worked for me.
This is a poor idea. subsidy should work just fine.
The issue comes when they are asking you to buy a phone then they lock it to their network!
Nope not gonna happen, people will rather than get a subsidy that should make them money, they will go buy the phone elsewhere and just get the sim deal they want.
The carriers will still be having issues with customers leaving and changing handsets, complaining about your customers is how to lose them. Who does PR for these guys needs to be fired.
The issue comes when they are asking you to buy a phone then they lock it to their network!
Nope not gonna happen, people will rather than get a subsidy that should make them money, they will go buy the phone elsewhere and just get the sim deal they want.
The carriers will still be having issues with customers leaving and changing handsets, complaining about your customers is how to lose them. Who does PR for these guys needs to be fired.
I'm not sure I agree with AT&T (and T-Mobile's) point of view on this topic. Getting rid of the subsidy does lower plan costs, but it also cuts into their own profits. If these subsidies go down, less people will be upgrading their devices every two years because it would cost them too much. Not to mention, if profits go down, less money will be invested in network infrastructure.
Some people would be forced to keep their devices much longer (2+ years) because they can't justify paying $600+ for the new iPhone/Galaxy.
Looking at their point of view, the subsidy is important. It promotes customer loyalty and a sure 2 year stream of money from a customer. Why would they throw it all away?
I understand that the average TMobile customer might not be loyal and is too hung up on paying the least amount of money possible, but there are plenty of us out there that have no reasons to switch carriers at all. AT&T provides me with fantastic service.
Why should lower plan costs to cater to the same lower-class demographic that TMobile seems to be chasing?
Of course, if this means that Apple and Samsung flagship prices will drop to sub $500 prices, then there might be a positive to all this...
Some people would be forced to keep their devices much longer (2+ years) because they can't justify paying $600+ for the new iPhone/Galaxy.
Looking at their point of view, the subsidy is important. It promotes customer loyalty and a sure 2 year stream of money from a customer. Why would they throw it all away?
I understand that the average TMobile customer might not be loyal and is too hung up on paying the least amount of money possible, but there are plenty of us out there that have no reasons to switch carriers at all. AT&T provides me with fantastic service.
Why should lower plan costs to cater to the same lower-class demographic that TMobile seems to be chasing?
Of course, if this means that Apple and Samsung flagship prices will drop to sub $500 prices, then there might be a positive to all this...
Get ready for the influx of people next year to say the iPhone 6 is too expensive, if all your US service providers go the AT&T way.
I always buy my phones outright, but that's just me because I hate being on contracts. This will make things interesting if AT&T really goes ahead with it.
I'm hoping this is the case. In Australia, the phone prices for the top Hero Phones is creeping towards $900+
I always buy my phones outright, but that's just me because I hate being on contracts. This will make things interesting if AT&T really goes ahead with it.
I'm hoping this is the case. In Australia, the phone prices for the top Hero Phones is creeping towards $900+
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I think another question becomes why is a phone $700.00 when an iPad mini or iPod touch which does many of the same things at a fraction of the cost. The extra price added to phones is already bloated so it seems odd that now they want to get rid of subsidies. I understand a phone has a few more components inside but seriously $400 for the extra components? Is that cell chip really worth that much?
If AT&T doesn't like subsidizing phones why do they and other companies allow early upgrades at 18 months to try to keep customers? It is they that have been pushing the early upgrades with the constant emails I get asking me to upgrade early so they can renew my contract. In fact I feel like I am constantly asked to upgrade my phone by my carrier and not by Apple or any other manufacturer. It is the carriers that created this culture so they could increase sales and increase their customer base. Now they are trying to put the blame on us. Classic
If AT&T doesn't like subsidizing phones why do they and other companies allow early upgrades at 18 months to try to keep customers? It is they that have been pushing the early upgrades with the constant emails I get asking me to upgrade early so they can renew my contract. In fact I feel like I am constantly asked to upgrade my phone by my carrier and not by Apple or any other manufacturer. It is the carriers that created this culture so they could increase sales and increase their customer base. Now they are trying to put the blame on us. Classic