AT&T CEO says smartphone subsidies must end as T-Mobile sweetens iPhone deal

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Comments

  • Reply 21 of 97
    tundraboytundraboy Posts: 1,882member
    What a load of BS. He makes it sound like the 'subsidy' is costly for AT&T when in fact there's a built in surcharge in the subscription to cover the cost of the phone and even after the phone has been fully paid for, the customer still keeps on paying that surcharge.
  • Reply 22 of 97
    jccjcc Posts: 320member
    This a$$ clown is full of sh!t. Why doesn't he mention how other parts of the world where this is already standard practice have data rates 1/10th of what we pay???
  • Reply 23 of 97
    stu[quote name="jm6032" url="/t/161132/at-t-ceo-says-smartphone-subsidies-must-end-as-t-mobile-sweetens-iphone-deal#post_2445267"]

    I don't see this happening. If you have an iPhone, you already paid the full price for it. It was part of the monthly bill. The carrier effectively "loaned" you the money to buy the phone. Nothing has fundamentally changed in the "new" model except the carriers are now explicitly telling you that you're getting a loan.

    As for lower income customers being locked out: I don't see that either. If a person walks into a carrier store they can still walk out with a new iPhone with almost nothing out of pocket. Or, in the case of T-Mobile, as mentioned above, nothing out of pocket.

    Again, about upgrading: What has changed? To get a low front end cost, the customer had to agree to a (typically) 24 month contract. Now, you agree to a loan of similar duration. If someone makes a low down payment and signs a 24 month contract, that person would most likely not be upgrading during that 24 months because of early termination fees. And one might assume that the early termination fee is simply related to the amount still owed on the phone. I don't see a significant change from the customer's perspective.

    What has changed from the customer perspective to require them to up front pay the full price of the phone?


    Absolutely nothing is different except favoring the carriers. Americans are just dumber everyday. Tmobile gimmick is only for suckers. 500 MB for four users. Try running a YouTube HD (which on mobile you cannot lower, only streams in HD). 500 MB all of 20 minutes. TMobile learned well from their German overlords. Stupid is as stupid does. WS shysters love this.
  • Reply 24 of 97
    dasanman69dasanman69 Posts: 13,002member
    jcc wrote: »
    This a$$ clown is full of sh!t. Why doesn't he mention how other parts of the world where this is already standard practice have data rates 1/10th of what we pay???

    Because they're 1/10th the size of the US.
  • Reply 25 of 97
    tundraboytundraboy Posts: 1,882member
    Quote:
    Originally Posted by macxpress View Post

    Even me, I don't really consider myself low income, but at the same time, I cannot afford to shell out $500-600 for a new phone at ANY time. I wouldn't be surprised if Apple doesn't have something to say about this. In the end, this will have an effect on their bottom line. If people have to start shelling out the full $500 for the phone they won't upgrade as much, not even every 2yrs. 

     

    They will just replace the "subsidy paid for by a hidden perpetual surcharge" with an installment plan, just like what T-Mobile does.  And you are better off with a T-Mobile style plan because once the phone is paid for, the installment payments end.  As it is now with AT&T and Verizon, you  keep paying the surcharge even after they have recouped the cost of the phone.  And by the way, T-Mobile doesn't charge you any interest when they advanced the cost of the phone.

     

    If you think your cell phone carrier was being so generous when they "subsidized" the cost of your smartphone, I am afraid you have been deceived these last few years.

  • Reply 26 of 97
    Quote:

    Originally Posted by jm6032 View Post

     

    What has changed from the customer perspective to require them to up front pay the full price of the phone?


    Currently, carriers continue to charge the "subsidy fee" even after the end of the 24-month contract. So, whether you upgrade or not, you're paying the subsidy every two years, and see only the subsidized price of the phone at contract renewal time. You do not have the option of declining the subsidy fees if you keep your old phone. This is a powerful incentive to upgrade every contract cycle.

     

    Absent subsidies, your installment payments will end after two years. If you do not upgrade your phone, your monthly bill will decline. This is a powerful incentive to NOT upgrade your phone every contract cycle.

     

    This is also an incentive to purchase service month-to-month. Customers opting to buy their phones outright have no incentive to sign lengthy contracts (unless the carriers offer some other incentive to do so). If the phone is purchased unlocked, the carriers lose any hold they have on customers, other than by offering the most compelling value.

  • Reply 27 of 97
    tundraboytundraboy Posts: 1,882member
    Quote:
    Originally Posted by fjose1929 View Post



    stu
    Quote:
    Absolutely nothing is different except favoring the carriers. Americans are just dumber everyday. Tmobile gimmick is only for suckers. 500 MB for four users. Try running a YouTube HD (which on mobile you cannot lower, only streams in HD). 500 MB all of 20 minutes. TMobile learned well from their German overlords. Stupid is as stupid does. WS shysters love this.



     

    Actually, it's 500 MB for each user.  Once you exceed that, you don't get cut off, your feed gets downgraded to a slower speed.  If you want 2.5 GB 4G, then pay $10 extra per month per phone (you can choose to upgrade only one line), if you want unlimited 4G, then pay $20 extra.



    I have 5 phones on my account, $135 a month including taxes.  unlimited talk and text and 500 MB data for each of the 5 phones.  You can't beat that with a stick.  Caveat: the deal is great only if T-Mo has good coverage in your area.

  • Reply 28 of 97
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by SpamSandwich View Post



    I wish Apple offered their own wireless service. I'd dump AT'n'T in a California minute.

     

    So, sometime next week?  ;) 

  • Reply 29 of 97
    jccjcc Posts: 320member
    dasanman69 wrote: »
    Because they're 1/10th the size of the US.

    Sorry but China is not 1/10the the size of US. The Euro zone is also not 1/10th the size as the carriers operate as a single entity there.
  • Reply 30 of 97
    dasanman69dasanman69 Posts: 13,002member
    john.b wrote: »
    So, sometime next week?  ;)  

    It's the holiday season, so more like next month. :lol:
  • Reply 31 of 97
    dasanman69dasanman69 Posts: 13,002member
    jcc wrote: »
    Sorry but China is not 1/10the the size of US. The Euro zone is also not 1/10th the size as the carriers operate as a single entity there.

    Does China have country wide coverage?
    All of Europe is still smaller than the US.
  • Reply 32 of 97
    richlrichl Posts: 2,213member
    Quote:

    Originally Posted by dasanman69 View Post





    Because they're 1/10th the size of the US.

     

    Network installation and maintenance costs per user are largely based on population density rather absolute population. The USA has a higher population density than Norway, Sweden or Finland and yet suffers significantly higher cell phone charges.

  • Reply 33 of 97
    nhtnht Posts: 4,522member
    Quote:

    Originally Posted by tundraboy View Post

     

    If you think your cell phone carrier was being so generous when they "subsidized" the cost of your smartphone, I am afraid you have been deceived these last few years.


     

    Well, for AT&T I doubt it will be cheaper than current costs.  Otherwise why would they be pushing for it to end?

     

    What AT&T wants to do is end subsidies AND keep the current rates.  If they are dumb enough to do that while Verizon keeps subsidies I'll finally move.

  • Reply 34 of 97
    Quote:


     

    Actually, it's 500 MB for each user.  Once you exceed that, you don't get cut off, your feed gets downgraded to a slower speed.  If you want 2.5 GB 4G, then pay $10 extra per month per phone (you can choose to upgrade only one line), if you want unlimited 4G, then pay $20 extra.

    I have 5 phones on my account, $135 a month including taxes.  unlimited talk and text and 500 MB data for each of the 5 phones.  You can't beat that with a stick.  Caveat: the deal is great only if T-Mo has good coverage in your area.



    That is a good deal. 

     

    T-mobile also has a pre-paid plan that gives you unlimited text, 100 voice minutes, and 5GB of data for $30/month.   Perfect for our 13 year old daughter, who will be getting an iPhone 5c this Christmas.

     

    We have good T-mobile coverage in San Diego, but YMMV.

  • Reply 35 of 97

    The cost of phones is going to come down too. I remember when i bought my first digital camera i paid a shit load and it didnt even do much and now it can be had for cheap.

    I just paid 380 for i5 1tera 8GB laptop why should i be paying 600+ on a phone makes no sense. I see most high end phones to drop to 400 in 1yr in 2-3yrs a high-end  phone without a contract could be had for 200.

    Tmo is also like a contract but it specifies the breakdown which is good for the consumer. and there r no hidden fees like early termination. its always better to buy phone without contract. I have always paid full price and pay very very little. You can get att lte plan from Straight talk for 45 and some unlimited plans start at 35/mon but with slower speeds. 

    There are alot of options for gsm phones right now i guess most ppl don't know about them

  • Reply 36 of 97
    gatorguygatorguy Posts: 24,091member
    frood wrote: »

    This isn't great news for companies that have expensive models that rely on subsidies to make them appear to be 'about the same cost' as other phones (Samsungs high end models, and yes, iPhones).

    Suddenly Motorola's new Moto G makes sense. Off-contract and unlocked @$179 compared to the typical $400-$700 retail for new smartphones?
  • Reply 37 of 97
    froodfrood Posts: 771member
    Quote:
    Originally Posted by jm6032 View Post

     



    I don't see this happening. If you have an iPhone, you already paid the full price for it. It was part of the monthly bill. The carrier effectively "loaned" you the money to buy the phone. Nothing has fundamentally changed in the "new" model except the carriers are now explicitly telling you that you're getting a loan.

     

    As for lower income customers being locked out: I don't see that either. If a person walks into a carrier store they can still walk out with a new iPhone with almost nothing out of pocket. Or, in the case of T-Mobile, as mentioned above, nothing out of pocket.

     

     

     

    What has changed from the customer perspective to require them to up front pay the full price of the phone?


     

    It is pretty unlikely people will buy their phones up front.  The system now is essentially say your data plan is $65 a month.  $50 of that is for the network costs, $15 of that is to recoup the heavy subsidies the carriers pay.   People who buy cheap phones that don't have a subsidy cost pay the same $65 a month.  So carriers make out like bandits on people buying the low cost unsubsidized phones (which is why they encourage their sales force to pitch them more heavily).


     


    Now you will just pay the $50 for the network.  If you want a $600 iPhone, they will finance it for you over 2 years for $25 a month.  So your phone cost went from $65/month to $75/month.  Someone who has their own phone will pay only $50/month.  A Nexus phone going for $300 can now be financed and those users will pay @ $63/month


     


    Basically people buying inexpensive phones will no longer be giving the people with expensive phones a free ride.  Sucks for me as I generally enjoy my expensive heavily subsidized phone- but I like the plan on principal.  I'm happy to actually pay for my own phone.
  • Reply 38 of 97
    Originally Posted by Mike Snoow View Post

    You can get att lte plan from Straight talk for 45…


     

    Straight Talk does not contract any LTE network.

  • Reply 39 of 97

    i personally wont go for the moto g but there r tons of ppl who dont need anything more advanced.

    moto g is similar to last yrs top of the line phones but still missing somethings.

    I would rather for for nexus 5 which has everything a top of the line phone should have.

  • Reply 40 of 97
    dasanman69 wrote: »
    Why do you assume it'd be cheaper?

    I don't. I assume it would be better overall.
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