I think for most carriers, your upgrade eligibility for a discounted handset is typically 18-21 months into a 24 month contract.
If you are so mad about upgrade eligibility and all those issues, take them out of the equation. Just start buying every phone direct from Apple contract-free and unlocked. No more bitching at carriers, no more termination fees, and you can even take it to any carrier you want whenever you want with 0 penalties.
If that $649 price tag gives you the shivers, then be glad AT&T or Verizon are willing to eat $450 of that for you, in exchange for a commitment to make it worth their while.
Yeah I bet they are paying their employees top dollar. Oh please we all know that most of the money goes to execs and stock holders that don't do any of the actual work.
Bet most AT&T employees don't even make enough to afford to live on their own.
I've worked for AT&T in the past and they pay competitive wages (every company has to pay market wages to retain the best talent). I don't think there's any AT&T employees working on minimum wage. Hell, even their retail staff gets around $14+ an hour, plus benefits.
Besides, running and operating towers, expanding infrastructure, doing customer service, etc. all costs money. Big money. Think about it. After the handset subsidy (which takes out $500 out of the $2000 you pay them over the course of a 2 year contract), that leaves them with $62 per month per customer.
A typical US-based worker earns about $3k a month and costs the company about $4k a month with administrative costs, payroll taxes, etc. included. It takes 65 subscribers to pay the salary of a SINGLE average paid worker.
Do you know how many workers it takes to run a phone company? A LOT. And they don't all make as little as $36k a year in salary either.
Yeah, they make some profits, but if they start making exceptions for MILLIONS of customers, how much would that cost them? If there's 10 million iPhone subscribers being given a $450 subsidy every year, thats an extra $4.5 BILLION in lost revenue ($9 billion lost over 2 years, where as the company budgeted for $4.5 billion). That's $4.5 billion the company won't have to build new towers, increase coverage, lower prices of their plans, etc.
So what the next step is going to be is to cut down on plans, like unlimited internet. Increase costs of minutes and texting etc. But of course every time the company does that to make up the shortfalls caused by bitching customers over handset subsidies, these same people cry foul there too.