AT&T CEO Says Big Subsidies for Smartphones is Coming to an End

AT&T CEO Says Big Subsidies for Smartphones is Coming to an End

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AT&T CEO Randall Stephenson says that big subsidies for smartphones is coming to an end as wireless carriers can no longer afford to fund a constant upgrade cycle, reports CNET.

Speaking at an investor conference in New York City on Tuesday, AT&T CEO Randall Stephenson said that with smartphone penetration at over 75 percent and soon reaching 90 percent, wireless operators need to work harder to get customers to use more of the network rather than simply getting on the network.

"When you're growing the business initially, you have to do aggressive device subsidies to get people on the network," he said. "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."

AT&T is trying to break the constant upgrade cycle by offering incentives to customers who keep older phones, saving up to $15 a month on their bill. For those, who want to change devices frequently, the company has introduced AT&T Next which lets customers receive a new device for $0 down then pay monthly installments until their next upgrade in 12 or 18 months.

"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," he said. "You can use your own device or finance it. I think this will be very powerful. It's where we see the market going."

T-Mobile is the first carrier to do away with subsidized devices entirely and offer a device financing plan instead. It appears that AT&T may be planning to do the same eventually.

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AT&T CEO Says Big Subsidies for Smartphones is Coming to an End

6italia0 - December 11, 2013 at 6:44pm
So put simply "I'm just here today to say we as a company don't know wtf to do, T-Mobile is kicking our a$$ here and I'm just here today to confirm that" lol
Zack soule - December 11, 2013 at 6:21pm
Sounds like bullshit mulatto president is pushing the economy to a new low. When USA gets an idea in their head
The world sucks thanks to rich people - December 11, 2013 at 5:37pm
We can't afford it anymore ? Seriously AT&T it's a biollionare company and CEOs making billions. You can't afford it ? Give me a break I or the regular human being can't afford it dumb piece of retard. No wonder companies stealing water and making profits on it because stealing as a white collar it's ok but if your in the hood and u steal then is wrong
mike ross - December 11, 2013 at 6:10pm
Yea, AT&T 3rd quarter earnings grew with increased smartphone sales, there so full of it.
ePunisher - December 11, 2013 at 4:56pm
Bullshit... They're not giving the phones for free what are they talking about. With 2 year contract we payed the phone and they made profit. I'm leaving AT&T anyways so it will relieve the pain of penetration. It will be just 89% in.
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