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AT&T CEO Believes Phone Subsidies Will Eventually Vanish

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Jun 3, 2015, 7:06 AM   by Eric M. Zeman   @zeman_e

Phone subsidies and two-year contracts are on their way out the door, according to Ralph de la Vega, AT&T's CEO of mobile and business solutions. "I think it is one of those options that is going to go away slowly," said de la Vega to Recode, "not because we insist on it but because customers will choose it less often." AT&T has made changes recently to limit the availability of subsidies and contracts. AT&T partners Best Buy and Apple, for example, no longer offer customers AT&T contracts. Instead, they push AT&T Next plans, which break down the payment for phones over time. AT&T says two-thirds of new smartphone sales during the most recent quarter were via its AT&T Next plans, which clearly indicates consumers' preference when it comes to purchasing new hardware. T-Mobile was the first major carrier to break from the subsidy model with its Simple Choice plans, and now most carriers offer lower-cost service plans that are paired with monthly device payments.


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Jun 3, 2015, 11:13 AM


We can loan you $200 upfront, or we can charge you more than that over the term... which one is the deathstar going to prefer?
"Our customers prefer" whichever option we put them in, and if they don't like it, they can kick rocks.
Do research before you go dogging it. I am getting rather tired of educating people like you on the difference between the two options. If you did your proper research, you would find that non-contract options benefit the consumer in every way.
Yes I found the same scenario. It is cheaper for me to buy a phone and be tied up with a 2-year contract than 'finance or lease it'. I certainly don't want to pay $200+ in total monthly payments and not own the device after 2 years.
The carriers will...
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