If AT&T and Verizon removed the subsidy option...what

[barkomatic]

Will we all do? I read somewhere that the CEO planned on taking that away because it's pricey for the company when in reality I know they can afford it but they are extremely greedy. All they want is profit.
Now I don't think the idea of paying over $650+ for a phone would be easy for anyone. Who knows maybe the iphone 6 will cost $700

Considering AT&T is a private company, it's perfectly natural for them to want a profit--they aren't a charity. The question is, can they pull off dropping the subsidy without losing customers.

As others have suggested, they'd probably allow people to finance their phones. However, I have a feeling that to qualify for financing or a "lower" monthly bill, you'd have to switch to their pricey data share plans--and away from any cheap grandfathered plans. Dumb people will do this to save money on their up front costs and end up paying 40% more for their plans.

 

[T5BRICK]

I'll just pay full price for the hardware. I don't see an issue with that if my monthly bill goes down.

 

[blarivee]

Voice over LTE is just voice. AT&T has been doing voice over 3G over a while now and it has worked fine.

The problem with data networks is not voice. Voice has become the easy part thus far to a point where carriers moved from minute-based plans to data-based plans with unlimited voice minutes. At this day and age, voice over cell towers is has gotten as dirt cheap as a text message. [well not as cheap but it is getting there]



As per the OP, subsidies are going to end. No question about it. This is how unlimited data started going away. First were the rumors, then the hard statements (like as of recent concerning subsidies), next step is actually getting rid of them. T-Mobile is already ahead of the curve and did it first in their 'Uncarrier' strategy.

I don't believe AT&T or any carrier (maybe Sprint) has implemented voice over 3G/LTE. The reason I believe so is because in the settings when you turn off data, you can still make calls. I think the carrier said it would be much easier to implement VOIP with LTE.

 

[webwbr]

Already did, with T-mobile. Sure, at&t and Verizon may try to get greedy and not want to change the monthly payments but competition and supply/demand will set the price eventually.

Well... AT&T/Verizon have the supply and the demand. TMO isn't/won't materially impact the industry.

Again, I wish it wasn't true, but it is. Just don't be disappointed when companies do what they were born to do - make money.

 

[NickRichyRich]

As a few people have said it would be nice not to be bound to a contract meaning that you could sell the phone and upgrade to a new one at anytime with a price. But if contracts were done away with I would be fine with that and be willing to pay the extra amount upright.

 

[JayLenochiniMac]

Well... AT&T/Verizon have the supply and the demand. TMO isn't/won't materially impact the industry.

Again, I wish it wasn't true, but it is. Just don't be disappointed when companies do what they were born to do - make money.

AT&T/Verizon having the supply and demand isn't set in stone. If TMO improves further and enough customers deflect, it'll materially impact the industry. Of course, they'll continue to make money. They're just protecting their bottom line because more customers are buying smartphones and therefore they're making the appropriate changes.

 

[jav6454]

I don't believe AT&T or any carrier (maybe Sprint) has implemented voice over 3G/LTE. The reason I believe so is because in the settings when you turn off data, you can still make calls. I think the carrier said it would be much easier to implement VOIP with LTE.

AT&T is phasing out old 2G networks, meaning that GPRS, and EDGE are about to go out the door and hence all voice traffic will be handled by 3G. It already is, but in many places ATT hasn't done the respective work.

Remember that AT&T is switching old 2G networks from lower frequencies to higher frequencies. This reframing is just a first step of phasing them out.

3G voice has been here for a long time already. Please don't act as if it hasn't. Now, as per Vericrap... Can't say since their tech is much different.

 

[Mrbobb]

There is no problem for us here because we can think long term and don't have a burger flipping job. For Joe Street Blow, even mentioning a 600 figure makes him go, Wow, I may not be able to afford this! Read some of the posts here, people are looking for bargains, like the $27 5c. That's all they see, what comes later, $70 a month the bloke can swing it.

 

[bigcstyle4]

Voice over LTE is just voice. AT&T has been doing voice over 3G over a while now and it has worked fine.

LTE is data only. There is no circuit switched telephony component like the 3G network has (UMTS). Voice over LTE would be VOIP and not a traditional phone call, as it is on a 3G GSM-style network.

 

[blarivee]

AT&T is phasing out old 2G networks, meaning that GPRS, and EDGE are about to go out the door and hence all voice traffic will be handled by 3G. It already is, but in many places ATT hasn't done the respective work.

Remember that AT&T is switching old 2G networks from lower frequencies to higher frequencies. This reframing is just a first step of phasing them out.

3G voice has been here for a long time already. Please don't act as if it hasn't. Now, as per Vericrap... Can't say since their tech is much different.

I had to Google it and I was correct. Voice in 3G/4G (HSPA) is done as circuit switched (CS) not packet switched. So it is not voice over data (HSPA/HSPA+) in 3G/4G.

----------

LTE is data only. There is no circuit switched telephony component like the 3G network has (UMTS). Voice over LTE would be VOIP and not a traditional phone call, as it is on a 3G GSM-style network.

Well said. Although I didn't hear any carriers running Voice over LTE. Found it. Apparently for now LTE only handles the data and voice is still using legacy 3G networks (AT&T)

http://gizmodo.com/5849355/att-says-its-lte-phones-will-be-slim-and-easy-on-the-battery

 

[jav6454]

I had to Google it and I was correct. Voice in 3G/4G (HSPA) is done as circuit switched (CS) not packet switched. So it is not voice over data (HSPA/HSPA+) in 3G/4G.

----------



Well said. Although I didn't hear any carriers running Voice over LTE. Found it. Apparently for now LTE only handles the data and voice is still using legacy 3G networks (AT&T)

http://gizmodo.com/5849355/att-says-its-lte-phones-will-be-slim-and-easy-on-the-battery

Yes, LTE doesn't have voice over it. This has always been a wide known fact. Main reason why Verizon can't do Data+Talk even now (besides the extra radio needed for CDMA).

If its still not voice over 3G/4G, right now, it will soon be. 2G is going away by end of 2015 and the transition will happen. For LTE networks to thrive, 2G must cease to exist to reassign precious spectrum to 3G and give 3G/4G's spectrum to LTE.

It is all about making more room for the much more efficient technologies.

 

[ross1998]

Maybe if all the carriers did this then people would complain about phones costing too much and prices will go down on phone like 450 brand new instead of 650...

 

[JayLenochiniMac]

Maybe if all the carriers did this then people would complain about phones costing too much and prices will go down on phone like 450 brand new instead of 650...

Not going to happen because we already have cheap Androids for <450.

 

[goobot]

It would be bad if they removed it. They would barley lower the monthly bill and still take half of what you pay for subsidy without actually ever giving you one.

Maybe if all the carriers did this then people would complain about phones costing too much and prices will go down on phone like 450 brand new instead of 650...

Wouldn't happen, phones like the iPhone were already 600+ before anyway.

 

[sahnjuro]

Things won change much in the beginning...

once AT&T and Verizon removed subsidy option. Most people would be pushed toward a purchasing a 2 year payment plan which ties them to either AT&T or Verizon.

But once T-mobile and Sprint build up their network on near par with AT&T and Verizon, a large fraction of people would start defecting (after 2 years) to a cheaper network since by then they will have an unlocked smart phone compatible with different LTE network (like iphone 5S does easily between Verizon, AT&T and T-mobile LTE networks.)

Hopefully a mass defection to cheaper network will induce the expensive network operators to lower their prices and a more sane data pricing will occur.

 

[Namji]

We did just fine buying the original iPhone with no subsidy and many people on this board buy iPhones at full price all the time. Monthly payments would get cheaper as carriers won't have to make up the expense of partially covering the cost of the phone. I don't see what the problem is.

Any tips on getting reduced or discounted rates since I have been out of contract ( I am in month to month ) since February 2013? And my monthly rate has been exactly the same. I just recently got the iPhone 5S from my wife's extra line paying sub prices.

 

[JayLenochiniMac]

Any tips on getting reduced or discounted rates since I have been out of contract ( I am in month to month ) since February 2013? And my monthly rate has been exactly the same. I just recently got the iPhone 5S from my wife's extra line paying sub prices.

Until carriers get rid of subsidies for good, we won't see a downward pressure (if any) in monthly payments. If you go month to month out of contract and still pay the same monthly rate, you're essentially subsidizing those who upgrade on the spot once their contract is up.

Otherwise, switch over to T-Mobile or take advantage of using your own line to upgrade to the iPhone 6 paying sub prices next year (and alternate between that and your wife's extra line every other year).

 

[Namji]

Until carriers get rid of subsidies for good, we won't see a downward pressure (if any) in monthly payments. If you go month to month out of contract and still pay the same monthly rate, you're essentially subsidizing those who upgrade on the spot once their contract is up.

Otherwise, switch over to T-Mobile or take advantage of using your own line to upgrade to the iPhone 6 paying sub prices next year (and alternate between that and your wife's extra line every other year).

At the moment I am with VZW with unlimited data services. Two reasons why I have not switched carriers as of today is 1. Unlimited data 2. great voice and data services and coverages.

I am still paying $97.89 a month for 450 voice, nights and weekends free and unlimited data. Same I have been paying since 2010.

 

[JayLenochiniMac]

At the moment I am with VZW with unlimited data services. Two reasons why I have not switched carriers as of today is 1. Unlimited data 2. great voice and data services and coverages.

I am still paying $97.89 a month for 450 voice, nights and weekends free and unlimited data. Same I have been paying since 2010.

Yeah, well, you're screwed with Verizon as they won't let you pay the subsidized price and still let you keep unlimited. If you were grandfathered with at&t (like me) you would be able to use your line and the extra line to upgrade every year paying sub prices and still keep unlimited.

Of course, this streak will end once carriers get rid of subsidies for good so it's just a matter of time.

 

[Namji]

Yeah, well, you're screwed with Verizon as they won't let you pay the subsidized price and still let you keep unlimited. If you were grandfathered with at&t (like me) you would be able to use your line and the extra line to upgrade every year paying sub prices and still keep unlimited.

Of course, this streak will end once carriers get rid of subsidies for good so it's just a matter of time.

I thought, I explained that I got a sub priced phone via using my wife's account line..... So.. no I am not screwed as I have the iPhone 5S when it was released... I can wait until another 2 years go by to get another subsidized phone using my wife's extra dumb phone line that her father uses.

So I am still wondering if you could explain how can I take advantages on lower monthly rates after my contract has been up?

 

[Ender Wiggins]

This is why I left Verizon and went to T-Mobile. I was grandfathered into unlimited, but I wanted to ditch my crappy Galaxy Nexus and couldn't do it without paying full retail.

Couple that with the fact that Verizon's LTE was freaking molasses in my area, I made the jump and am so glad I did. An upgrade every 6 months, saving almost $100 per month, and super fast unlimited LTE (over 30mbps) with built in hotspot of 2.5GB per month.

Verizon sucks.

 

[JayLenochiniMac]

I thought, I explained that I got a sub priced phone via using my wife's account line..... So.. no I am not screwed as I have the iPhone 5S when it was released... I can wait until another 2 years go by to get another subsidized phone using my wife's extra dumb phone line that her father uses.

So I am still wondering if you could explain how can I take advantages on lower monthly rates after my contract has been up?

I never said lower monthly rates are possible once contract is up. Just that there will be some incentive to lower the monthly payments (or flatlining them for a while) once all carriers get rid of subsidies as they won't have to make up the expense of partially covering the price of phones.

 

[Apple Trees]

If they lower the monthly payments to offset the phone financing like T-Mobile did, then I will be happy for them to remove the subsidies. If not, then I would prefer it stay like it is now.

 

[kevink2]

Couldn't agree more. I don't see the carriers "giving back" any of the subsidy money. Most likely, they will keep the monthly plans as they are, citing some inane "benefit" that they happen to add (and the customer has no choice to opt out of). ARPU goes up + capital not tied up funding phones in 2 year contracts = big win for the carriers.

Remember that part of their competition for non subsidized phone users is the MVNOs.

If you can afford it, getting a phone with a contract is easier. You don't have to worry about refills. If, for some reason, you went out of the country you can have an international plan. But, depending on circumstances, ATT would probably be willing to charge $80 vs $100 if the alternative is you going to an $45 plan, of which ATT only gets a fraction of that.

I'm technical enough, so I may just do that when my contract ends. If I decide to get the next iPhone next fall, I'll just calculate what my options are.

 

[mtneer]

Remember that part of their competition for non subsidized phone users is the MVNOs.

If you can afford it, getting a phone with a contract is easier. You don't have to worry about refills. If, for some reason, you went out of the country you can have an international plan. But, depending on circumstances, ATT would probably be willing to charge $80 vs $100 if the alternative is you going to an $45 plan, of which ATT only gets a fraction of that.

I'm technical enough, so I may just do that when my contract ends. If I decide to get the next iPhone next fall, I'll just calculate what my options are.

While the MVNO's do serve a niche; they have a huge weakness - they have to run on the big boys' networks. If at any time, a MVNO becomes threatening to the big carriers; the major carriers can squeeze them by their sensitive parts until such threat/ competition diminishes.