Why Don't Carriers Just Let Us Upgrade?

[Reaper0bot0]

Just as Apple has costs beyond the materials themselves that go into a phone, the carriers spend more money per customer than simply the subsidy they get for the contract they sign. The networks, employees, the whole human structure behind those two things, advertising, rents, taxes, etc all add up.

 

[DiamondMac]

Any sources to back that up, or are you just passing off your opinion as fact?

You mean, outside of AT&T's consolidated revenue of nearly $32 billion for 2010?

I have yet to see a single fact that AT&T needs 2 years to recoup a subsidized phone. None.

Then again, I think even AT&T admits this as they simply want to find anyway possible to get any amount from every consumer

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the carriers spend more money per customer than simply the subsidy they get for the contract they sign.

Huh? Where does this come from? Can you show me where you get this from?

 

[TC25]

Then again, I think even AT&T admits this as they simply want to find anyway possible to get any amount from every consumer

Wow, a company admits it wants to make a profit. What a revelation.

 

[NoHo]

Stop being a dumbass and finish the 2 year contract you signed. Or at least get close to finishing it. Seriously, you have the iPhone 4. It's not like you're using a 3GS from 3 years ago that keeps dying because it can't hold more than 5 hours of battery life.

 

[rockyroad55]

Maybe for those 70 days, they can get 2 billing cycles worth of money out of you

 

[DiamondMac]

Wow, a company admits it wants to make a profit. What a revelation.

Who said they didn't? Why do people like you keep stating that line when nobody whatsoever says AT&T can't make a profit?

The fact that you resort to it tells me that when I bring up their ridiculous profits (thus destroying their "Woah is us, we need more fees" line), you have absolutely nothing to say other than crying about how they should be able to do WHATEVER, WHENEVER, HOWEVER and anyone who disagrees just needs to shut up.

Brilliant.

 

[SAD*FACED*CLOWN]

I've gotten EVERY iPhone during the launch window and AT&T has let me upgrade early every time...my monthly bill is over $100 and my service has only been disconnected once in over 9 years (old Cingular customer)...the only time I met ANY resistance was during the 3GS launch and I had to threaten to drop them as a carrier to get upgraded...maybe I'm just lucky...but I was told I can upgrade again to the 4S

 

[kdarling]

Let me rephrase it: I can't imagine how it would take AT&T or any other carrier 24 months to make back the cost of the subsidy.

Subsidies are usually geared towards paying back the carrier within 12-24 months of a two year contract, with higher cost user plans shifting that towards the lower end (which is why such users often get to upgrade early).

When AT&T subsidized the iPhone 3G, their 3Q08 earnings call brought out the fact that it had cost them $900 million for subsidies in that quarter alone (~$375 per phone). This caused their earnings and stock price to slip. AT&T also noted that they expected to get those subsidies paid back by 2010, almost two years later.

In late 2009, the Yankee Group published a research report that concluded it took AT&T an average 17 months of a 24 month contract to break even on an iPhone subsidy.

Hey you know what would be really cool? If you could just pay the difference of what you owe them.

That would be very cool. I just read that one of the smaller virtual carriers (I forget which one) is now going to do that. In other words, their ETF will be based on the actual subsidy remaining, not just a generic value.