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  • AT&Tís Ralph de la Vega Believes Phone Subsidies Will Soon be Gone With All Carriers


    We recently reported that mobile carrier AT&T would be getting rid of two-year commitment plans in a matter of weeks. Re/code has another report that notes CEO and President of AT&T Mobile and Business Solutions, Ralph de la Vega, believes that phone subsidies will soon disappear anyway. Apparently de la Vega feels that customers will be choosing financing plans over two-year commitments. Although customers would be paying more for their devices as opposed to the price of signing up for a 2-year contact, customers would be able to switch phones sooner.

    According to de la Vega,

    I think it is one of those options that is going to go away slowly.
    About a year and a half ago, AT&T CEO Randall Stephenson announced that carriers would stop handset subsidies soon. Low and behold, carriers are starting to get rid of it as Verizon Wireless plans on doing the same thing by the end of the summer. Now, Apple will only be allowing customers to upgrade and use the Next Program in stores, which means customers will be able to upgrade to a new device in 12, 18, or 24 months.

    De la Vega noted that the Next plan was beneficial for both the consumer and the company. He also reported that smartphone sales last quarter were two-thirds sold without subsidies. Weíre not sure how beneficial the plan is for consumers, as we would now be practically Ďleasingí our devices if we wanted to upgrade in 12/18/24 months. The other option would be to pay the device over the course of 20/24/30 months and then keeping it or just paying it all up front. Either way, everyone will be paying full price for their iPhones, it would just be a matter of initial payment, or a payment plan.

    Source: Re/code
    This article was originally published in forum thread: AT&Tís Ralph de la Vega Believes Phone Subsidies Will Soon be Gone With All Carriers started by Akshay Masand View original post
    Comments 27 Comments
    1. Sage I's Avatar
      Sage I -
      I've bought almost all my iPhone's and my lady's iPhones at full retail price...
    1. Anon9mouz's Avatar
      Anon9mouz -
      This is so stupid why not just leave that option of 2 year for people that want to use it
    1. jco's Avatar
      jco -
      Quote Originally Posted by Anon9mouz View Post
      This is so stupid why not just leave that option of 2 year for people that want to use it
      Because it doesn't benefit them. It's all about squeezing the most out of the consumer.
    1. ThuD Muffin's Avatar
      ThuD Muffin -
      With AT&T the best option is to buy the phone outright.
    1. jco's Avatar
      jco -
      According to Cnet: "AT&T will still offer the traditional service contract at its own stores or through its website, a spokeswoman said."
    1. talkin73's Avatar
      talkin73 -
      Quote Originally Posted by jco View Post
      Because it doesn't benefit them. It's all about squeezing the most out of the consumer.
      This option does represent a huge cost shift from company to consumer. Notable financial trade off to upgrade more regularly.
    1. eprisencc's Avatar
      eprisencc -
      This is awful. I always buy my phones on contract and just give last years model to my wife. Carriers are awful with this follow the leader trend. For people that still have unlimited data, we are going to be paying more with the added per payment for the phone.
    1. buggsy2's Avatar
      buggsy2 -
      Maybe now that the consumer feels the pain of Apple's extraordinarily high prices, there will be pressure to reduce them. I have to think more than a few potential iPhone buyers will say "no way, I can get an Android for 25% of an iPhone". So I see some benefits to finally being forced to pay the true price.
    1. Magnum's Avatar
      Magnum -
      They can suck my wee wee with this poop. This is some male cow doo doo. Gtfoh.
    1. WHUDS's Avatar
      WHUDS -
      I do not understand why people think paying down several hundred dollars, then paying more for service is getting a "free phone" When I compare At&t Next to a contracted "subsidized" phone there is little difference in price except the extra cost of "subsidized" means paying more for service forever.
    1. NewD's Avatar
      NewD -
      On NEXT or Subsidized, both, require a $375 fee to get out of the service contract which is still 2 years. Just because subsidized pricing is going away doesn't mean that the 2yr service contract period is going away. On NEXT you're still locked in to service for two years per my reading.. And of course the service price per month is based on however many gigabytes and phones you have. So let's take that entire service pricing out of this cash outlay comparison between NEXT and Subsidized - since they're the same. Now all that's left to compare is what you're paying for the phone.

      On 2yr contract you were paying 199, 299, 399 and that's all you would ever pay for the phone itself. On NEXT you are now paying 649, 749, 849 (for a iPh6) (full retail) in payments over a 12,18,20 month period..

      How, in your calculator, WHUDS, is that not MORE $ with NEXT?
    1. mirilopr's Avatar
      mirilopr -
      Well, I don't know how ATT works, but with my company the UPGRADE plan, which is the same as NEXT, the price of the plans are way cheaper, so if you add the financing of the phone, you're paying more or less the same thing.
    1. hogcia's Avatar
      hogcia -
      It's all one BIG scam and Lie. That's all it is. Don't be fooled people. So glad I jumped to TMobile.
    1. NewD's Avatar
      NewD -
      Quote Originally Posted by hogcia View Post
      It's all one BIG scam and Lie. That's all it is. Don't be fooled people. So glad I jumped to TMobile.
      TMobile's doing same thing.. No subsidized plans. You'll eventually get screwed too.
    1. NewD's Avatar
      NewD -
      Quote Originally Posted by mirilopr View Post
      Well, I don't know how ATT works, but with my company the UPGRADE plan, which is the same as NEXT, the price of the plans are way cheaper, so if you add the financing of the phone, you're paying more or less the same thing.
      I'm already paying the lower rate per line with ATT 2yr contract.. Only $25/line.. Not the $40/line usual.. So I assure you I will be paying a lot more on NEXT.
    1. Magnum's Avatar
      Magnum -
      Aaaaaaand theft on cellphones will once again sky rocket
    1. Villebilly's Avatar
      Villebilly -
      Sprint has had a program similar to Next for awhile. I don't use it because I don't like the idea of leasing my phone. I'm curious at the end of the lease period what happens if you don't want the latest phone upgrade? Does your bill go down?

      The part many people forget in these phone lease programs is that yeah you don't have to put money up front but you don't get to sell your old phone for $250 or so you were used to getting.
    1. NewD's Avatar
      NewD -
      Quote Originally Posted by Villebilly View Post
      Sprint has had a program similar to Next for awhile. I don't use it because I don't like the idea of leasing my phone. I'm curious at the end of the lease period what happens if you don't want the latest phone upgrade? Does your bill go down?

      The part many people forget in these phone lease programs is that yeah you don't have to put money up front but you don't get to sell your old phone for $250 or so you were used to getting.
      Actually - 'subsidized pricing' of phones is only an "American concept". Around the rest of the world, their ONLY choice is paying full retail. So it sets up a wonderful little way for you to make a nice profit by simply selling your 2 year old phone on eBay (unlocked brings the highest priced) for almost double what you paid for it on subsidized pricing. AT&T only offers you about $150 for an old phone.. You can get 400-500 for it on eBay.

      To answer your first question.. As I'm understanding what I'm reading on AT&T's site, the only way it's a 'leasing program' is when you choose to turn your phone back in and get a new one. You are not 'required' to turn in your phone at the end of the 12 or 18 or 24 month period... If you don't - you now OWN the phone.. You've paid it off. A person in another thread aptly explained that it's really not a 'leasing program' (like with cars) where you have to turn the vehicle back into the company at the end of the lease period or BUY it.. It's more like a '0% financing' program. You OWN the phone at the end certain number of installments (see chart below).. There are 4 NEXT plans..
      Quote Originally Posted by From ATT's Site View Post
      Options:
      1) AT&T Next 12: Divided into 20 installments; trade in and upgrade after 12 installments.
      2) AT&T Next 18: Divided into 24 installments; trade in and upgrade after 18 installments.
      3) AT&T Next 24: Divided into 30 installments; trade in and upgrade after 24 installments.
      4) AT&T Next 12 with Down Payment: 30% of device cost down, divided into 28 installments; trade in and upgrade after 12 installments.
      And this is how I understand it..

      1) NEXT12: nearly a true lease... you're highly motivated to upgrade after 12 months and turn in phone.. though if you pay 20 installments you can own- Highest monthly installment payment for phone..

      2) NEXT 18: A path to ownership after 24 installments - 2nd to Highest monthly installment payment for phone..

      3) NEXT 24: A path to ownership after 30 installments - Lowest monthly installment payment for phone..

      4) NEXT 12(with 30% down): A path to ownership after 28 installments - 2nd to Lowest monthly installment payment for phone.. (but big up front downpayment - remember AT&T still needs to get its 'full retail price back'.. LOL
    1. luvmytj's Avatar
      luvmytj -
      Looks like I will just stop upgrading every 2 years. If others do as I will, apple will see sales drop as I will no longer buy 4 iPhones very 24 months and others won't either.
    1. Magnum's Avatar
      Magnum -
      Quote Originally Posted by luvmytj View Post
      Looks like I will just stop upgrading every 2 years. If others do as I will, apple will see sales drop as I will no longer buy 4 iPhones very 24 months and others won't either.
      Same here, I've got every phone when it's been released, won't be doing that anymore. Fuq out a here