AT&T to drop phone subsidies.

clohamon

http://news.cnet.com/8301-1035_3-57615114-94/at-t-chief-we-cant-keep-doing-big-subsidies-on-phones/

Stephenson also acknowledged that breaking customers of their habit of upgrading to a new phone every 18 months to two years is not an easy task. But he said a business models focused on financing rather than providing a subsidy would be "transformative" for the industry. He said the company's new AT&T Next program, which offers no-money down and 0-percent financing, drives smartphone penetration in a way that is more sustainable over time.

If it catches on it might bring a bit more visibility to the real costs of delivering mobile data.

SpaceTime

They've no subsidies in Belgium and no locked phones.
Which is the main reason that most Belgians have awful mobiles!

You see a lot of cheaper, unheard of androids, relatively few iPhones or high end Androids and a lot of very old phones patched up with sellotape.

Phone theft there is also very high relative to here because the high end models are in demand and inaccessible to people who can't buy them outright on their credit card or whatever.

I'm not sure this will work to be honest. It could end up being the death of the smartphone industry, or certainly the higher end models anyway.

I'd say Verizon and T-Mobile will have a field day on this one as I can't really see that upgrade habit being broken, especially in the states where most people are on contracts. The prepay market never really took off to the same extent that it did in Europe.

watty

The subsidies need to stop.
1) Increases EEE waste
2) Decreases perceived value of Phones
3) Increases prices for all. Why am I paying for iPhones? I don't have one.
4) Barrier to new phone maker entries to market and innovation!
5) Bad distraction for Operators. They need to concentrate on delivering quality networks and selling ONLY a connection.

SpaceTime

The problem though is that the handsets actually don't tend to last more than 18 to 24 months in a lot of cases anyway.

It is a big issue with waste but, through a combination of accidental damage, wear and tear and also just obsolesce as software requires faster and faster hardware, a 24 month old phone's usually pretty bashed up and often too slow to cope with modern apps.

They're not selling phones anymore. They're basically small table computers with a phone function.

We already have a situation where you can go on a SIM only plan if you want to in most (all) European countries. I don't really think dropping the subsidies entirely will do anything other than stagnate the industry to be perfectly honest.

You'll see a drive towards cheaper phones but they'll remain just as disposable.

smee again

SpaceTime wrote: »

They've no subsidies in Belgium and no locked phones.
Which is the main reason that most Belgians have awful mobiles!

You see a lot of cheaper, unheard of androids, relatively few iPhones or high end Androids and a lot of very old phones patched up with sellotape.

Phone theft there is also very high relative to here because the high end models are in demand and inaccessible to people who can't buy them outright on their credit card or whatever.

I'm not sure this will work to be honest. It could end up being the death of the smartphone industry, or certainly the higher end models anyway.

I'd say Verizon and T-Mobile will have a field day on this one as I can't really see that upgrade habit being broken, especially in the states where most people are on contracts. The prepay market never really took off to the same extent that it did in Europe.

You cannot compare Belgium with here. Different countries have different cultures. About 5 years ago during the boom times I walked from one end of Enniskillen to the other and couldn't find a single phone shop when down south we had at least one in every little town.

watty

Enniskillen is West of the Bann.
I bet plenty of Phone shops East of the Bann.

bk

I don't believe subsidised phones here are the bug problem that they are in the US.

Here in Ireland the majority of phone users are on pay as you go. Pay as you go contracts usually over little or no subsidy.

The cheapest and most innovative recent carrier, 48 months, doesn't even sell phones at all! You have to bring your own.

If you do want a contract, then you can either opt for a 12 to 24 months contract with a subsidised phone or a much cheaper monthly contract with your own phone.

The US until now has been very different. Till now, pay as you go didn't exist! Instead the vast majority of people were on contracts. And even worse, even when you had finished paying off your phones subsidy, the price of your contract never reduced, there were no cheaper, no subsidy contracts.

Fortunately that is starting to change in the US. But here in Ireland I believe we are already in a pretty good place.

croo

Is any phone truly subsidized?
I would have thought "financed" would be a better description - you contract to pay an inflated monthly fee that covers the price of the phone & the price of financing it.

The real questions I have is; if you are sim only customer are you also financing those smart phone via higher contract/call prices? To date I have gone the sim only route.

SpaceTime

You get a fairly significant discount for going SIM-only on most Irish networks. Some really good offers out there, especially on the smaller networks and MVNOs.
In the states, you generally get pretty much forced to take a phone whether you want one or not on a lot of the networks. They're really not that friendly to the idea of bringing your own handset in a lot of cases. Although some of the MVNOs are now actively encouraging it and since the Google Nexus range appeared SIM free, that's kind of changed things quite a bit.

On CDMA networks like Verizon and Sprint it's actually impossible as there's no SIM! The phone's ID codes are hard-coded into it and then logged onto the network much like the old 088 system here used to work only digital and 3G/4G.

TAFKAlawhec

smee again wrote: »

You cannot compare Belgium with here. Different countries have different cultures. About 5 years ago during the boom times I walked from one end of Enniskillen to the other and couldn't find a single phone shop when down south we had at least one in every little town.

I'm pretty sure there was an O2 store in Enniskillen around five years ago. There was probably one or two small independent shops too, a lot of them didn't last very long though.

I know in Omagh today there is at least stores for O2, Vodafone, Carphone Warehouse & phones4u.