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If AT&T and Verizon removed the subsidy option...what
- Thread starter DBZmusicboy01
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Agreed, but it is better than what it was.
I don't really think anyone knows how much the subsidy is...
Does the actual subsidy provided by the carrier really matter from the point of view of the subscriber?
This of it this way. How much does a customer pay for an iPhone 5s at full price? $650. How much is it under a 2-year contract? $200. From the customer's perspective, the subsidy is $450.
So discounting the cost of the plan by $15/month does not benefit the customer.
The fact (or assumption) that the carrier pays less than $650 for the iPhone is irrelevant.
How does it not benefit? $15 is waaaay better than the $0 it's been for years.
If you are saying that the subsidy is $450 and you divide that by 24 months that shakes out to $18.75 a month in what you say the carrier is subsidizing.
AT&T is giving you a $15 bill credit if you buy the device at full retail. That's pretty much discounting the subsidy, if the subsidy is $450.
Feel free to correct me if I'm missing something here.
That's exactly what I'm saying. $15/month doesn't quite make up the $450 subsidy that is lost under the current plan. It's even worse when you look at the difference between the subsidized price and the unactivated price of Android flagship phones. That difference can be up to $600 in some cases ($699 - $99).
It's my opinion that the Big2 (AT&T and VZ) don't really want to drop the subsidy model. Tmo and Sprint are underdogs, so they would be more likely to do something to shake things up. In the end, this will lead to the carriers becoming dumb pipes, which is something they desperately want to avoid.
So this $15/mo is some sort of half-assed deal designed to push you into the NEXT plan instead of a pure Euro-style plan where the minutes/data costs are low.
I agree, yet they're talking about getting rid of it. They can't eat their cake and have it too.
In my opinion, AT&T and VZ won't give up the current subsidy model unless they can continue with locking in subscribers. That's why they're doing programs like NEXT and stuff.
Ultimately, we won't be able to get a true Euro model until the FCC adopts a single standard across the board. Until that happens, you're still quasi locked in to your provider since they all use different technologies and frequency bands.
And since the FCC is bought and paid for by the telecom firms, this won't be happening any time soon.
ADD - and regarding the reason why AT&T is talking about it ... it's because Tmo has shown some success with their uncarrier model. AT&T is hedging. If Tmo were to flop, then AT&T would be as quiet as a church mouse on the subject.
