Vote 2020 graphic
Everything you need to know about and expect during
the most important election of our lifetimes

AT&T: We Can't Keep Subsidizing Your Phones

Illustration for article titled ATT: We Cant Keep Subsidizing Your Phones

The big carriers have long subsidized phones to lure customers in. But that could all be coming to an end, if AT&T's chief is to be believed.

Advertisement

Speaking at a conference on Tuesday, AT&T's CEO Randall Stephenson explained that wireless operators can no longer afford to fund the smartphone upgrade cycle, reports CNET. With 75 percent of customers now using a smartphone—a figure that's still climbing—their finances just can't stretch. He explained:

"When you're growing the business initially, you have to do aggressive device subsidies to get people on the network. But as you approach 90 percent penetration, you move into maintenance mode. That means more device upgrades. And the model has to change. You can't afford to subsidize devices like that."

Advertisement

Instead, you can expect to see more and more plans that encourage users to keep their older phones—much like the overhauled plans AT&T announced last week—which incentivize sticking with what you've got. It means convincing many users that they don't need a phone every 18-24 months, or at least convincing them that the cost must fall on them. As Stephenson explained:

"If you are a customer and you don't need to upgrade your device, you can get unlimited talk and text and access to the data network for $45 all-in. You can use your own device or finance it. I think this will be very powerful. It's where we see the market going."

In other words, AT&T are confirming what you may have feared for some time: you're gonna have to start stumping it big time for each phone you get. [CNET]

Share This Story

Get our newsletter

DISCUSSION

What a load of garbage.

As an American living in France, I pay 20 euros a month for unlimited phone calls, unlimited internet, texts, free calls to North America and I can tether my phone free of charge. This is without a contract. So, that's about $27.

Americans are used to getting ripped off with their phone plans. Most people are just fine paying $100/month, which I find ridiculous. So let's do the math - $27 for two years is about $650. $100 for two years is $2400.

And ATT says they can't afford the $300 for subsidizing phones for their customers?