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AT&T CEO: Carriers Can't Afford Big Subsidies for Devices Any Longer
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Capitalist Pigs
I feel so bad for AT&T having to help me pay for my iPhone. Maybe if I pay full price for my phones AND allow them to charge huge money for cheap data that'll help. And while we're at it, let's let them increase those charges to help pay for all those wonderful cell towers they generously provide us with.
I feel so bad for AT&T having to help me pay for my iPhone. Maybe if I pay full price for my phones AND allow them to charge huge money for cheap data that'll help. And while we're at it, let's let them increase those charges to help pay for all those wonderful cell towers they generously provide us with.
Exactly, and that is precisely why this shouldn't have an effect on Apple's sales. Everyone knows Apple products are expensive and chances are their customers will happily pay the 3.75$ increase to their monthly plans to keep using Apple products, though they might be pissed at AT&T for that slight price increase. But at least this means the phones would all be unlocked from now on and people would be free to move to other carriers.
Plus, what no one else mentioned, if you are upgrading your phone every 2 years, again chances are you can sell it for more than 90$, which is the price increase AT&T is making over the 2 year contract. So At&T wins, and people who sell their devices and upgrade every 2 years also win under these new terms.
What does the rate cost have to do with with the statement made by the OP that I was replying to?
It's disingenuous to say that the human race is going to change just because the US market may end its subsidies. It's barely going to make a dent on how the world reacts because they are already there in the first place and it didn't stop them from buying stuff they don't need and throwing it away.
What smartphone OEM is making a decent living selling super cheap smartphones? From most news reports the only profitable ones are Samsung and Apple. According to a recent report in the Wall Street Journal, Moto's margin on the Moto G is 5%. How long would a stand alone OEM like HTC survive on 5% margins? Moto can offer cheap phones because Google owns them and Wall Street doesn't seem to care whether they're profitable or not. Probably same thing with Nokia where Microsoft will finance cheap hardware just to get marketshare (like they're doing with these deep discounts on Surface tablets).
If you change your iPhone every couple of years, you already do you just pay for it over time in your phone bill. Remember that 2 year contract?
I don't think this changes anything . so what no more subsidies the phone plans should be cheaper and like they said, they will offer finance programs that have you pay for your $700 smart phone over time. No different except when you own your phone, you don't have the higher phone bill price we hope at least.
No, YOU are crazy paying $100 a month just to pay $200 upfront for an iPhone. No subsidies = lower tariffs. That's how it works now in more and more countries, e.g. France. Unlimited calls, texts and data for 20 (inc taxes). Bring your own device - of course all phones bought on a standalone basis are factory unlocked. If you can't shell out 700, carriers offer financing plans which are not linked to your tariff - and phones are still unlocked. Best of both worlds.
Good move AT&T.
first they come up with some bs excuse to take away unlimited plans, then they charge more for "shared" plans than the regular plans that they've had, and now this...
wish the fcc would give all these carriers and phone manufacturers a swift kick in the ass for trying to constantly rip customers off instead of lowering prices. after all, what has changed that requires more cost from the carrier or the phone manufacturer? if anything, the hardware and service costs have gone down over the years.
wish the fcc would give all these carriers and phone manufacturers a swift kick in the ass for trying to constantly rip customers off instead of lowering prices. after all, what has changed that requires more cost from the carrier or the phone manufacturer? if anything, the hardware and service costs have gone down over the years.
Except they don't want you to buy the handset. They want you to go to their 'Next' plan, which pockets them more money (since you have to give them back the phone after upgrading; which they turn around and sell)
I laugh at all the hypocrisy of the 'how greedy are they' crowd. You are the same people who fall all over yourself to defend Apple squeezing every ounce of profit they can (outdated flash memory prices, lightning cables, huge profit margins per device)....then get out your pitchfork when the cell company tries to make an extra buck.
That being said, I agree that cell carriers can't have it both ways. If you want to stop subsidizing, then stop charging the same fees to people who own their devices.
You also have to think the carriers have moved to into somewhat maintenance mode. For the first few years of smartphone growth, all the carriers were in an arms race to big faster towers and expand coverage. It always seemed like they were a step behind. Now that LTE is standard in many area, it's really more about filling in the blanks to manage the load. True LTE speeds can handle pretty much anything we expect to throw at our phones for the foreseeable future. The heavy lifting of that arms race is over.
That being said, I agree that cell carriers can't have it both ways. If you want to stop subsidizing, then stop charging the same fees to people who own their devices.
You also have to think the carriers have moved to into somewhat maintenance mode. For the first few years of smartphone growth, all the carriers were in an arms race to big faster towers and expand coverage. It always seemed like they were a step behind. Now that LTE is standard in many area, it's really more about filling in the blanks to manage the load. True LTE speeds can handle pretty much anything we expect to throw at our phones for the foreseeable future. The heavy lifting of that arms race is over.
hahaha, great to be in the UK as we will have subsidies for years and years. But at least this will give Android even more of a boost in the American market as more people will buy one of those at a cheaper price then an iPhone.
This is though an example of the capitalist world we have created, greed and keeping the share holders happy by making bigger profits year on year, is far FAR MORE important then the customer giving the money. And Apple is EXACTLY the same.
This is though an example of the capitalist world we have created, greed and keeping the share holders happy by making bigger profits year on year, is far FAR MORE important then the customer giving the money. And Apple is EXACTLY the same.
The one mistake I see the carriers making is that while they now want to go into maintenance mode, then why the hell do they advertising and pimp the latest and greatest phones?
I've been using off contract phones since 2009 and have no desire to go back.
I've been using off contract phones since 2009 and have no desire to go back.
I am, I'm moving our service to T-Mobile (via a WalMart offered plan). Unlimited talk, texts and data (2.5GB of 3G data and then it's throttled) for $40/mo. Have an iPhone 4 so 3G data is fine. I am changing to an iPad mini as a phone using VoIP since I'm home almost all the time anyway. Will save us over $100/mo from the two iPhone plan we currently have with AT&T. We could buy a new phone at $650 every 7 months with the savings.
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Why exactly do you think that "unlimited plans" are reasonable in a world where data demand is exploding on a global scale. If you don´t put in a lot of money (which has to be earned) into your infrastructure , there is no way that companies can keep up. And that "cloud" buzzword mentality doesn´t help, either. And don´t ever make the mistake to compare wireless with wired technologies, they just cannot be compared like that.
People from the US are already living on a high horse, anyway, because in other countries, they don´t even offer unlimited plans for exactly that reasoning (and yes, competition is healthy there, so that´s no excuse).
You´re not gonna solve that problem with forcing something from the outside. Either the companies want more customers and create a business model that makes people happy or they don´t. If some providers want to charge high prices, the customer base shrinks, it´s that easy.
If you want to really complain about something, complain about the insane prices Apple charges for their iPhones. It´s ridiculous how much more money they earn every quarter and how high their gross margins are.
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They just gave themselves a raise. The traditional subsidy was $450 over 2 years, roughly $20 a month. A $15 discount over 2 years is just $360, so they just made another $90 off you.
Not to mention the "data plans" smart phone fees...
$45 w access to the data network. Sureee, unless you can opt out of data then the bs should be stopped.
Another money making scheme of AT&T. CEO selling back the snake oil to the oil makers.
How come if what he says is true then why carriers outside the US charge half or less and are still profitable?
All he wants is to keep having an increased in revenue every year w.out work
Another money making scheme of AT&T. CEO selling back the snake oil to the oil makers.
How come if what he says is true then why carriers outside the US charge half or less and are still profitable?
All he wants is to keep having an increased in revenue every year w.out work
Lots of people here up in arms over the loss of the carrier subsidy...and yet there are people camped out and waiting in droves to purchase non-subsidized iPads at the full $800+ price point AND tack on a data plan on top of that... we accept paying "full price" on iPads, yet we balk at (potentially) lower monthly service charges and non-subsidized iPhones? Not sure that makes sense...
As other posts have mentioned, this can't work unless they change their service plan model in addition to the removal of the subsidy. This strategic forethought may be what Apple is thinking of in terms of some of rumors floating around that they may start offering their own wireless service-- who knows...perhaps Apple will offer incentives on their phones or different financing options if you use their service...
As other posts have mentioned, this can't work unless they change their service plan model in addition to the removal of the subsidy. This strategic forethought may be what Apple is thinking of in terms of some of rumors floating around that they may start offering their own wireless service-- who knows...perhaps Apple will offer incentives on their phones or different financing options if you use their service...
I really wish you would stop spreading this FUD. Go do some reading about what England did with British Telecom. Was there some government intervention and regulation? You bet! Do ALL governments subsidize their country's infrastructures? Yep. But the reason England and the rest of Europe have such low rates and such great choice has more to do with competition than anything right now. Much more competition than what we have in the States. Stop beating your chest and waving your flag. Go live somewhere else for a while and find out what's really going on. Or at least do some research.
http://goo.gl/IP1pES
Except NEXT is at LEAST $25 per month and AT&T OWNS the old phone when you "upgrade."
Here's why getting rid of subsidy is a good thing:
I: After the 2 year contract is completed, will the monthly fee be reduced?
Verizon: No. It will be the same.
I: Since my phone is paid off, won't you give me some credit or allowance after the contract?
Verizon: No. Nothing changes. It will be the same. Blah, blah ...
They shamelessly keep charging the customer the same!
(from another forum)
With T-Mobile, after you pay off your phone in 24 monthly installments, your monthly cost will be reduced. You just now pay for wireless service only.
I: After the 2 year contract is completed, will the monthly fee be reduced?
Verizon: No. It will be the same.
I: Since my phone is paid off, won't you give me some credit or allowance after the contract?
Verizon: No. Nothing changes. It will be the same. Blah, blah ...
They shamelessly keep charging the customer the same!
(from another forum)
With T-Mobile, after you pay off your phone in 24 monthly installments, your monthly cost will be reduced. You just now pay for wireless service only.
Except in the us is not going to be cheaper. Maybe $15us cheaper and you will have to pay way more than that for the phone. so you end up paying a ton money. No money is going to be saved in the us by the customer. NONE.
How to be truly carrier independent?
It seems like the same iPhone hardware is physically capable now of supporting both GSM and CDMA, but it also seems that, at least for now, you simply cannot move a phone from AT&T/T-Mobile to Verizon/Sprint/Misc in this country. Until that's possible, portability's not going to be of great use... But it may make selling your phone and switching easier...
What I didn't see mentioned is whether or not this will mean the end of 2 year contracts with early leave penalties, which in theory were about paying for the phone...
It seems like the same iPhone hardware is physically capable now of supporting both GSM and CDMA, but it also seems that, at least for now, you simply cannot move a phone from AT&T/T-Mobile to Verizon/Sprint/Misc in this country. Until that's possible, portability's not going to be of great use... But it may make selling your phone and switching easier...
What I didn't see mentioned is whether or not this will mean the end of 2 year contracts with early leave penalties, which in theory were about paying for the phone...
So what no one here has touched on is carrier parody which is i have options to use carrier A or B as they are very similar. I suppose in some parts of the county that exists but not where i live. It is big V or bust has been for so many years i can not remember to the extent most of the other players have just stayed away as it is not profitable to come into our area as every one is under contract to the big V. This sort of thing more than price deductions and subsadies needs to be stopped. The big V locked up a whole 25 mile square region where i am from and then jacked up the price of the carrier they bought promptly after gobling them up. So have that as another angle we need the big 2 or 3 to be more equal. When you have the 10 ton giant of networks like the big V as your only option it does not matter how much cheaper tmo is or ATT your just up the creek with there service like it or not. This sound like i am talking rural area but it is a town of over 20k people and connected to the largest southern concert fest every year AKA bonnarooo and we still have day to day crap service from every one but verizon. It makes it hard to go home when you have any other carrier.
Quite frankly I don't understand what AT&T are nbanging on about? Is the American model of subsidising different from the UK model? If not then I struggle to understand how AT&T can't afford...
Here's a comparison:
Currently I own my iPhone ad just pay Orange for the usage. I pay £10.50 per month and get 250 min free, unlimited text and 500 GB internet. That works out at £125 per year or £250 per 2 years. If I were to add the cost of buying the phone myself to that it would total £780.
If I were to get a contract with similar allowances I would be tied for 2 years and would have to pay around £30 per month plus a one off £120 for the phone. Which works out at £840 for two years.
So based on that Orange is actually making more money if I were on a subsidised contract. On top of that the majority of users never use the full allowances anyway. So why are phone companies whinning about?
Despite this I agree with changing people's mentality regarding upgrading their phones quite often. A good iPhone would last for at least 4 years so there's no need to upgrade it. Unless you are one of those peple who want the latest and greatest all the time and they never use most of those features.
Or unless you have an iPhone 4 and Apple brings out iOS7 and doesnt warn you that it makes your iPhone 4 slower than a snail (and on top of that doesnt even allow you to reverse back to the previous iOS).
Here's a comparison:
Currently I own my iPhone ad just pay Orange for the usage. I pay £10.50 per month and get 250 min free, unlimited text and 500 GB internet. That works out at £125 per year or £250 per 2 years. If I were to add the cost of buying the phone myself to that it would total £780.
If I were to get a contract with similar allowances I would be tied for 2 years and would have to pay around £30 per month plus a one off £120 for the phone. Which works out at £840 for two years.
So based on that Orange is actually making more money if I were on a subsidised contract. On top of that the majority of users never use the full allowances anyway. So why are phone companies whinning about?
Despite this I agree with changing people's mentality regarding upgrading their phones quite often. A good iPhone would last for at least 4 years so there's no need to upgrade it. Unless you are one of those peple who want the latest and greatest all the time and they never use most of those features.
Or unless you have an iPhone 4 and Apple brings out iOS7 and doesnt warn you that it makes your iPhone 4 slower than a snail (and on top of that doesnt even allow you to reverse back to the previous iOS).
Lets assume this is for a 2 year contract.
15 x 12 = 180 x 2 = $360
So for the length of the contract, a customer saves $360 for bringing in their own device. But they spent $700+ buying that device. At the moment that subsidy is part of their contract and they're paying the extra $360 + $199+ upfront so in the end, AT&T ends up pocketing minimum $140+ for this change.
Am I missing anything here? I think they should knock off at least $30 per month in order to entice customers to go for this en masse.