AT&T exec sees end of phone subsidies on horizon

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Comments

  • Reply 41 of 92
    MacProMacPro Posts: 18,352member
    mubaili wrote: »
    Subsidiary is such a genius plan and I love it. It keeps me getting a new phone every two year without thinking about finance and total cost over two years. There are too many serious things to worry about. I don't want to spend days comparing 10 plans just so I can save $200 in two years.

    We are grandfathered in too and I have no concept of what it must be like to have data caps. For that i am grateful. Regarding the initial costs, if the cost of the iPhone wasn't built in to those carrier monthly charges, in theory they would be a lot lower one would think. The snag I foresee is, they will do away with the subsidy AND maintain the same rates as if they were still recouping the subsidy.
  • Reply 42 of 92
    ajminnjajminnj Posts: 26member
    Quote:
    Originally Posted by Roake View Post



    The way this will roll is as follows:



    1. Subsidy is gone. Sorry. That $299 phone is now a $699 phone. The $599 128gb Plus model will now cost a cool grand ($!)

    2. Monthly plan stays the same price (remember that previously, the plan included the subsidy, so now you are paying for the subsidy without getting the benefit of it).

    3. Add payments for your new phone on top of the monthly payments. So much for saving money.

    4. Want to trade in your phone for a new one after a year? No problem. AT&T owns the old one. Sorry! Can't give it to family. Those payments you were making... Gone! AT&T says thanks for the free money.

    5. Want to own your phone? Pay the retail price on the phone. ALL of it, now. Then you get the title to the phone.

    6. Oh, yeah. You can't preorder your phone from Apple.com unless you prepay the full, unsubsidized, retail price UP FRONT (so much for payment plans). Want to preorder and have a payment plan? Sucks to be you. Guess you could finance it on a credit card at credit card interest rates (not... smart).

    7. Average amount you pay AT&T goes up from 15-25% (annually), and you have zero extra to show for it.

    8. What do you think happens if you accidentally break or lose that phone you are using (you know, since you are now BORROWING it from AT&T)? Think they will offer to just replace it for free?

    9. Thanks, AT&T, for having your customer's best interests at heart.



    Where this actually has some benefit are for people who really want to buy a nice phone, but can't scrape together the $299 to get it. Otherwise, it's just a bad deal all around, from what I can tell. The are any number of ways to change carriers with no penalty these days, so that's not even a real benefit.



    Bottom line... AT&T is a bunch of greedy bastards.

    Let me start by saying, I do not work for AT&T, I am only a customer:

    1) Mostly true, it was always a $699 phone, only AT&T paid $400 of it before

    2) AT&T fixed this with their Mobile Share+ plan.  If your phone is outrite paid for, or on a NEXT Plan, the mobile services goes down.  (With the Next payment, the total payment is back to the old levels until paid off)

    3) See 2)  For a new every 2 type customer, there really is not any net savings, however for a new every 3 customer like my wife, the third year is substantial savings.

    4) Half true and half false.  There are two points in the NEXT "Loan".  The first is where you trade in the phone and the rest of the loan is forgiven so you can get a new phone.  This is 12 or 18 Months depending on if you are on NEXT12 or NEXT18.  The second, you outright own the phone and can hand it down, sell it, or do whatever.  This is usually 18 or 24 months depending on if you selected NEXT12 or NEXT18

    5) While that is an option, that is not how NEXT works.  See 4) for details

    6) Not True.  I ordered my iPhone 6+ at launch on Next through Apple.com.  Mind you before the iPhone 6 launch that was true

    7) On the original mobile share plan you are correct, but with the current mobile share+ it is no longer true.  As for the amount you pay through NEXT, every time I have calculated it out it has been within $0.25 of the full price at the end of the loan (Which over several hundred dollars is easily explained by rounding), so it is really a zero interest loan.

    8) More of a money loan than a phone borrow, but without insurance, nobody replaces anything for accidental damage.  And with being a loan, it is a lot cleaner as to how much is still owed on the damaged phone.

    9) Really more of a reaction to T-Mobile's new plans.  Also they want people off of the grandfathered unlimited plans, and almost nobody bought into the original Mobile Share plans.  AT&T customers voted with their wallets and AT&T listened not out of goodness, but to not lose customers.

     

    While I agree that AT&T is a greedy corporation (pretty much like every corporation) all of your complaints were based on out of date or incomplete information.

  • Reply 43 of 92
    mrboba1mrboba1 Posts: 274member
    Quote:

    Originally Posted by ARMANDXP View Post



    The thing I don't understand is:



    I have an iPhone 6 Plus, paid $428.00 after taxes on a two year subsidy. I'll sell it when the new phone comes out and probably pay around the same amount or a little under for a new 2 year subsidy.



    If I were to get an iPhone 6 Plus under Next program, I'll pay $42.50 a month for 12 months and then trade the phone back into AT&T. This ended up costing me: $510.



    As someone who is always going to trade up to a new phone each year, can someone please help me rationalize what really is better for me. I'd seriously like to know which avenue I should go next time. I do still have unlimited data, also.

     

     

    Quote:

    Originally Posted by Roake View Post



    The way this will roll is as follows:



    1. Subsidy is gone. Sorry. That $299 phone is now a $699 phone. The $599 128gb Plus model will now cost a cool grand ($!)

    2. Monthly plan stays the same price (remember that previously, the plan included the subsidy, so now you are paying for the subsidy without getting the benefit of it).

    3. Add payments for your new phone on top of the monthly payments. So much for saving money.

    4. Want to trade in your phone for a new one after a year? No problem. AT&T owns the old one. Sorry! Can't give it to family. Those payments you were making... Gone! AT&T says thanks for the free money.

    5. Want to own your phone? Pay the retail price on the phone. ALL of it, now. Then you get the title to the phone.

    6. Oh, yeah. You can't preorder your phone from Apple.com unless you prepay the full, unsubsidized, retail price UP FRONT (so much for payment plans). Want to preorder and have a payment plan? Sucks to be you. Guess you could finance it on a credit card at credit card interest rates (not... smart).

    7. Average amount you pay AT&T goes up from 15-25% (annually), and you have zero extra to show for it.

    8. What do you think happens if you accidentally break or lose that phone you are using (you know, since you are now BORROWING it from AT&T)? Think they will offer to just replace it for free?

    9. Thanks, AT&T, for having your customer's best interests at heart.



    Where this actually has some benefit are for people who really want to buy a nice phone, but can't scrape together the $299 to get it. Otherwise, it's just a bad deal all around, from what I can tell. The are any number of ways to change carriers with no penalty these days, so that's not even a real benefit.



    Bottom line... AT&T is a bunch of greedy bastards.

     

     

    Quote:

    Originally Posted by Howie Isaacks View Post



    I'll just pay full price from now on. Screw the subsidies. I'm not going to make payments on my iPhone. That's stupid.

     

     

    You are all missing certain very important details:

     

    With the subsidies, you did not get a free 128GB 6+ phone. The standard phone cost $199 down (as stated in the story image) and the biggest one would cost you $499 down, and your subsidy would cover the other $450. That is what the subsidy is - $450 each time for a 2 year commitment.

     

    With the 2 year contracts, you are paying roughly an extra $20 per month over 2 years, which works out to be about $480. I assume there's some rounding error (or maybe not) so the two prices are equivalent over 2 years, no matter which phone you get.

     

    For the first poster: if you pay off the entire phone balance, the phone is yours to keep and do what you please with it. Hand it down, sell it, frame it on the wall. As long as you pay it off, AT&T does not take it back. It is a horrible idea to just let them have it to trade up to a new phone, you will almost always get more back on it on the open market.

     

    For the last poster, you will pay full price either way, up front or over 18, 24 or 30 months. There is no interest on it and you end up paying exactly the same for the phone, full price. It's just up to you whether you want to do it all at once or over the term. Based purely on economics, you are slightly better off paying a 0% interest loan for longer amounts of time simply based on inflation.

  • Reply 44 of 92
    ajminnjajminnj Posts: 26member
    Quote:
    Originally Posted by ARMANDXP View Post



    The thing I don't understand is:



    I have an iPhone 6 Plus, paid $428.00 after taxes on a two year subsidy. I'll sell it when the new phone comes out and probably pay around the same amount or a little under for a new 2 year subsidy.



    If I were to get an iPhone 6 Plus under Next program, I'll pay $42.50 a month for 12 months and then trade the phone back into AT&T. This ended up costing me: $510.



    As someone who is always going to trade up to a new phone each year, can someone please help me rationalize what really is better for me. I'd seriously like to know which avenue I should go next time. I do still have unlimited data, also.

     

     

    Quote:
    Originally Posted by ARMANDXP View Post

     



    Anyone????


     

    See my other post (2 before this one) above (Specifically answer 4) for more details on NEXT.  Each person's situation is different.  So you will have to do the math.  With my actual and anticipated usage significantly below the data cap, and the need to add more voice minutes and two more lines it made sense for me to give up my unlimited plan and switch to the mobile share+.  My services portion of the bill went down, no more voice overages, gained tethering for when I need it and with the NEXT12 payments on 2 iPhone 5Cs my overall bill was about the same.  As a new every 1 customer who is currently still unlimited it may not make sense for you to do NEXT.

  • Reply 45 of 92
    penchantedpenchanted Posts: 1,070member
    Quote:

    Originally Posted by digitalclips View Post





    We are grandfathered in too and I have no concept of what it must be like to have data caps. For that i am grateful. Regarding the initial costs, if the cost of the iPhone wasn't built in to those carrier monthly charges, in theory they would be a lot lower one would think. The snag I foresee is, they will do away with the subsidy AND maintain the same rates as if they were still recouping the subsidy.



    And people should be up in arms about this but it's gone on too long I fear. The plan rates should have been dropping after the contract was met all along. This new approach brings potential heightened visibility to the issue which will hopefully result in some investigations for overcharging.

  • Reply 46 of 92
    mike1mike1 Posts: 1,911member

    I understand why they would want to get rid of the subsidy model. However, it is a better plan me. I prefer lower monthly payments and I can make the decision as to when I want to drop the $200 or $300 for a new phone.

  • Reply 47 of 92
    sdw2001sdw2001 Posts: 17,044member
    Quote:

    Originally Posted by SockRolid View Post

     

     

    Hey Ralph.  Since you're busy shaping the future, why don't you get rid of data caps too?

    I'm grandfathered in to unlimited data.  But lots of users aren't.  Which sucks for them.


     

    It's worse than that, because you don't really have unlimited data.  I am grandfathered as well, and have received throttling warnings from time to time.  I don't understand how something can be "unlimited" but then get reduced in speed up to 95% when a LIMIT is reached.  The thing is I could see the case for AT&T not having to grandfather anyone, but I suppose they believe they'll get sued and/or nailed by the Feds.  In researching it, it appears it was the original terms of service that screwed these carriers.  Sprint agreed to unlimited data for "the life of the line of service."  I can only imagine AT&T is similar.  

     

    One thing I do know is I'm going back to Verizon when it's time for my next phone.  I nearly bailed when I got my iPhone 5 a few years back, and then considered it again when I got my 6.  AT&T's data network is a huge steaming pile compared to VZ.  

  • Reply 48 of 92
    danielswdanielsw Posts: 905member
    Quote:

    Originally Posted by chadbag View Post



    "AT&T already fields an installment program called AT&T Next that spreads out full handset pricing over 12, 18 or 24 months. "



    This is incorrect. The 12/18/24 plans spread out the payments over 20/24/30 months. The 12/18/24 is after how many months you can trade in the phone on an upgrade. (In all cases if you pay ALL the payments, you keep the phone at the end).



    It IS correct when you trade in your phones on new ones, which is what we're going to do.

  • Reply 49 of 92
    danielswdanielsw Posts: 905member
    Quote:

    Originally Posted by pmz View Post



    NEXT is better anyway.



    I agree.

  • Reply 50 of 92
    karas11karas11 Posts: 32member

    Monthly plan price never discount for 2 yr contract account.(well.. last time they discount the 4GB plan & when they announce next plan, 2yr account holder pay as same next or bring your own phone plan price.)

     

    You need to add total price for 2 yr(24month).

    initial phone price + monthly plan price.

     

    Last month I calculate for my family bring my own phone(iphone 6 plus 64GB * 3) plan with 10GB data will save me around $450 for 2 yr.(compare to 2yr contract subsidy)

    So 1 person save $6.25 per month over 2 yr.

     

    AT&T devide 3 groups for unsubsidy family share account.

    under 6GB data plan no discount.

    from 6GB under 10GB, $15 discount per phone.

    Over 10GB, $25 discount oer phone.

     

    subsidy or not if you own the phone, you will scoup some money at the end of 2yr as sell the phone.

     

    I guess AT&T might have different deal with apple or other phone maker as pay back to them.

    subsidy phone, AT&T maybe pay full price to phone maker up front. 

    That is the reason AT&T don't discount the subsidy plan price.

    Next plan phone, AT&T maybe pay per month to phone maker which it will save lots of money in long run.

  • Reply 51 of 92
    sdw2001sdw2001 Posts: 17,044member
    Quote:

    Originally Posted by hardcle View Post

     

    When the 6 came out I ran the numbers from all the carriers 6 ways to Sunday and the best deal was still my old AT&T discounted subsidized plan.  I plan to stick with it for as long as they let me.

     

    One thing I never see in these comparison tables is the value of the phone at the end of the contract.  On the payment plans, you have to return the phone to the carrier unless you pay it off.  On contract, the phone is yours to sell or whatever you want.  I've been selling mine, and that money largely pays for the subsidized cost of my new phone.


     

    Exactly.  As others have noted, the 12/18/24 is a lie.  That's the contract term, not the full payoff.  It's like balloon financing.  If AT&T mandates this, am 100% certain to switch back to Verizon or to another carrier.  

     

    Consider the math.  In the current model, I buy a $300 subsidized phone every two years.  I then sell my old phone for around $150.  Given that I got my first iPhone in 2008, I've been doing this upgrade model for 5 years now--since 2010.  As things stand, it my capital cost (hardware) is $75 per year, or a little over $6 a month.  I pay no additional monthly hardware fee.  My total monthly cost, including service and amortized hardware cost per device is about $86.00 a month (unlimited data), or $1,032 a year.  

     

    *New system:  I pay zero down for a new iPhone.  The "24 month" upgrade option costs me about $21.00 a month in addition to the service plan, which according to AT&T, will cost me $70 a month (6GB) plus $25.00 per month access.  This brings my monthly cost to about $116.00.   I believe I do get a discount through work, so let's call that $105.00 a month.  

     

    Conclusion:  As best as I can tell, I'd pay $20 a month more than my current cost, all for the privilege of upgrading at the same rate I do now. Am I missing something here?  

     

     

    *Hypothetical, since my wife and I do share an account with two lines. In truth, my individual current cost might be more than $86.00, but it's close.  

  • Reply 52 of 92
    mrboba1mrboba1 Posts: 274member
    Quote:
    Originally Posted by SDW2001 View Post

     

    Conclusion:  As best as I can tell, I'd pay $20 a month more than my current cost, all for the privilege of upgrading at the same rate I do now. Am I missing something here?  

     

     

    *Hypothetical, since my wife and I do share an account with two lines. In truth, my individual current cost might be more than $86.00, but it's close.  


     

    Yes, your $199 down payment at the beginning; and your bill is lower, as it doesn't have the same "per line charge" on contract and on NEXT.

     

    If you pay off your phone in full on the NEXT plan (or Verizon's for that matter) the entirity of the cost over the 2 years works out to be virtually identical.

    I did all my homework before I chose what plan to do, and the NEXT plan actually saves you a small amount of money if you do not simply hand the phone back to AT&T when you upgrade your phone.

     

    What they are banking on is people upgrading as soon as they can (month 18 of the NEXT24) and not having the cash to pay off and buy their current phone. At $21/month, that is $126. For that you can sell it at a profit or have a free and clear phone for someone else in your family's upgrade.

    If you don't, then you are paying more into the machine of AT&T.

  • Reply 53 of 92
    roakeroake Posts: 648member
    ajminnj wrote: »
    armandxp wrote: »
    The thing I don't understand is:


    I have an iPhone 6 Plus, paid $428.00 after taxes on a two year subsidy. I'll sell it when the new phone comes out and probably pay around the same amount or a little under for a new 2 year subsidy.


    If I were to get an iPhone 6 Plus under Next program, I'll pay $42.50 a month for 12 months and then trade the phone back into AT

    armandxp wrote: »
     


    Anyone????

    See my post 37 above (Specifically answer 4) for more details on NEXT.  Each person's situation is different.  So you will have to do the math.  With my actual and anticipated usage significantly below the data cap, and the need to add more voice minutes and two more lines it made sense for me to give up my unlimited plan and switch to the mobile share+.  My services portion of the bill went down, no more voice overages, gained tethering for when I need it and with the NEXT12 payments on 2 iPhone 5Cs my overall bill was about the same.  As a new every 1 customer who is currently still unlimited it may not make sense for you to do NEXT.

    This moron is an AT&T lackey. He gave it away with this "makes sense to give up the grandfathered unlimited data plan" bit.


    Booool!
  • Reply 54 of 92
    dasanman69dasanman69 Posts: 12,984member
    gerard wrote: »
    dasanman69 wrote: »
    What Verizon policy?
    If you are grandfathered with unlimited data plan, are on a congested cell tower and have used more than 5GB in your current billing cycle you will be throttled while connected to said cell tower.

    They thought about doing that but never actually did it, so the policy doesn’t exist. I'm over 30 GB for this cycle and haven't gotten throttled at all.
  • Reply 55 of 92
    chadbagchadbag Posts: 1,097member
    Quote:

    Originally Posted by DanielSW View Post

     



    It IS correct when you trade in your phones on new ones, which is what we're going to do.




    No, it is not correct.   The actual "full handset pricing" is spread over 20/24/30 months.  If you trade in early, at 12/18/24, you do not pay the full handset pricing.  You've only paid a portion of the full handset price, which is why you have to trade/give-up and not keep the phone.

  • Reply 56 of 92
    chadbagchadbag Posts: 1,097member
    Quote:

    Originally Posted by SDW2001 View Post

     

     

    Exactly.  As others have noted, the 12/18/24 is a lie.  That's the contract term, not the full payoff.  It's like balloon financing.  If AT&T mandates this, am 100% certain to switch back to Verizon or to another carrier.  

     

    Consider the math.  In the current model, I buy a $300 subsidized phone every two years.  I then sell my old phone for around $150.  Given that I got my first iPhone in 2008, I've been doing this upgrade model for 5 years now--since 2010.  As things stand, it my capital cost (hardware) is $75 per year, or a little over $6 a month.  I pay no additional monthly hardware fee.  My total monthly cost, including service and amortized hardware cost per device is about $86.00 a month (unlimited data), or $1,032 a year.  

     

    *New system:  I pay zero down for a new iPhone.  The "24 month" upgrade option costs me about $21.00 a month in addition to the service plan, which according to AT&T, will cost me $70 a month (6GB) plus $25.00 per month access.  This brings my monthly cost to about $116.00.   I believe I do get a discount through work, so let's call that $105.00 a month.  

     

    Conclusion:  As best as I can tell, I'd pay $20 a month more than my current cost, all for the privilege of upgrading at the same rate I do now. Am I missing something here?  

     

     

    *Hypothetical, since my wife and I do share an account with two lines. In truth, my individual current cost might be more than $86.00, but it's close.  


     

    The Next plan is about the same over the 2 year life of the normal contract when you consider phone cost, service costs, activation fee, etc.  If you have at least 10GB plan, then Next is cheaper by about $190.

     

    This is ignoring people who have grandfathered unlimited plans and actually use a buttload of data.  (I had a grandfathered unlimited plan but since I was not using a buttload of data each month, just a few GB, I gave it up and went to the normal plan as it saved me money)

     

     

    Let's do the math with a 16GB iPhone 6 for a plan less than 10GB:

    I'll leave out the cost of data per month since that is the same either way

     

    On contract:   $199 plus $40 activation fee.  =  $239.00.

    24 months x $40 service fee = $960

     

    24 month cost == $1199

     

    On Next installment plan:  $0 plus $0 activation fee

    24 months x $27.xx = $649.20   (based on Apple's figures in the chart)

     

    24 month x $25 service fee = $600

     

    24 month cost == $1249.20

     

     

    The 2 year contract is slightly cheaper

     

     

    If you have a 10GB or more data plan associated with this, then on the 2 year contract the price for the monthly service fee is still $40/month.   But on the Next plan it is $15 a month

     

    So, Next plan 24 months, 10GB plan, the service fee is 24 x $15 = $360

     

    Total 24 month cost for phone is only $1009.20 or you save about $190 over the cost of the 2 year contract plan.

     

    If you share this data with multiple people on the same plan, EACH PHONE is only charged the $15 per month ($40 per month per phone on contract) and you can easily share 10GB of data across multiple phones.

     

    I run 3 lines on Next with a 10GB plan.  Saves us about $570 over 24 months compared to getting the same phones, data plan, etc on 2 year contract.

     

    I ignored taxes and federeal fees and all that in the calculations.

     

    If your data plan is over 10GB

  • Reply 57 of 92
    kindredmackindredmac Posts: 153member
    What's funny is that I have gone to AT&T to see if switching to NEXT is actually cheaper for my family plan and they have repeatedly said to stay on the Grandfathered-In Unlimited plan due to the discount that I get from my employer. I would much rather buy my iPhone at the "subsidized" price than to pay a monthly fee to "rent" my iPhone...

    All this is is a grand leasing scheme like in the automobile world. You pay $XX per month for a phone that you do not own, until you break it, then turn it in for a what at the end?

    Plus if Apple says no then AT&T won't be doing jack about this.
  • Reply 58 of 92
    chadbagchadbag Posts: 1,097member
    Quote:

    Originally Posted by KindredMac View Post



    What's funny is that I have gone to AT&T to see if switching to NEXT is actually cheaper for my family plan and they have repeatedly said to stay on the Grandfathered-In Unlimited plan due to the discount that I get from my employer. I would much rather buy my iPhone at the "subsidized" price than to pay a monthly fee to "rent" my iPhone...



    All this is is a grand leasing scheme like in the automobile world. You pay $XX per month for a phone that you do not own, until you break it, then turn it in for a what at the end?



    Plus if Apple says no then AT&T won't be doing jack about this.

     

    How much data combine do you use peak and on average per month?   I'd bet you also get a discount on any data plan you would do through Next.    I'd do the math myself, and not rely on the flunkies at AT&T stores.

     

    I did not include it in my calculations, but we also get a discount through the wife's employment that saves us on the 10GB plan (not the extra lines per month charges though).  I think it may also discount the main lines charge.   Would have to double check.  But we did not lose that discount when we went off the grandfathered unlimited.

     

    The Next is no more a lease thing than the subsidized plan is since you have to stay on the subsidized plan.   It is really an interest free loan installment plan, and not a lease, since you own the phone at the end.  One a lease you have to return or buy out (including those $1 buyout leases).

  • Reply 59 of 92
    sdw2001sdw2001 Posts: 17,044member
    Quote:

    Originally Posted by mrboba1 View Post

     

     

    Yes, your $199 down payment at the beginning; and your bill is lower, as it doesn't have the same "per line charge" on contract and on NEXT.


     

    I used the number from the website for the NEXT plan.   

     

     


    Quote:


    If you pay off your phone in full on the NEXT plan (or Verizon's for that matter) the entirity of the cost over the 2 years works out to be virtually identical.


     

    I just showed that wasn't true, especially when you sell your old phone.  

     

    Quote:


    I did all my homework before I chose what plan to do, and the NEXT plan actually saves you a small amount of money if you do not simply hand the phone back to AT&T when you upgrade your phone.


     

    But this is what you're not getting...a 24 month plan is not a 24 month plan.  The phone is not paid off in 24 months (or 12, or 18 for that matter).  

    Quote:


    What they are banking on is people upgrading as soon as they can (month 18 of the NEXT24) and not having the cash to pay off and buy their current phone. At $21/month, that is $126. For that you can sell it at a profit or have a free and clear phone for someone else in your family's upgrade.

    If you don't, then you are paying more into the machine of AT&T.



     

    OK.  

  • Reply 60 of 92
    tokyojimutokyojimu Posts: 420member
    chadbag wrote: »
    I ignored taxes and federeal fees and all that in the calculations.
    Just to clarify, the "fees" are not federal or from any other governmental body. They are inventions of AT&T (and all the other carriers). It's a complete scam. What other business is allowed to advertise one price and then when you get to the store has added on a bunch of fees.
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