AT&T’s Next isn’t just proving popular with customers. It’s proving popular with its accountants. The move away from subsidized phones gives it a new equipment revenue stream while keeping its newly contract-free customers loyal.
AT&T’s new Next program is simple: You pay the full cost of your device off in monthly installments, but at month 12 you can trade in your phone for a new device. There are a few catches.
Absolutely need the newest smartphone as it’s released? Then Jump is right for you. It will cost you, but it’s much cheaper than buying a new phone every six months.
Although it claims the move “isn’t about subsidies”, O2 is effectively moving away from the traditional model where carriers subsidize the phones they sell up-front, then bury the real cost in a combined monthly tariff.
Verizon CEO Lowell McAdam is watching T-Mobile’s new contract-free, subsidy-free mobile strategy closely. If consumers start biting, McAdam says Verizon is willing to shake up its own pricing and contract policies.
Hype over T-Mobile’s “Uncarrier” event on Tuesday is building. There are no guarantees about what exactly T-Mo will announce tomorrow, but here’s what we expect — and hope — will come out of the NYC press extravaganza.
The practice of locking phones is a symptom of a greater disease in the U.S.: device subsidies. If we can separate the hardware from the service, consumers will ultimately have greater choice and save money.
T-Mobile CEO John Legere says a magenta-branded iPhone will be on the carrier’s shelves in three to four months. Given T-Mo’s accelerated network rollout that will put the phones launch right in sync with its LTE launch.
Ofcom wants to make it possible for consumers to pull out of their mobile contracts without paying a penalty, if the carrier raises the agreed contract price. But, as operators have warned, this may mean drastically reducing upfront hardware subsidies.
T-Mobile will lean heavily on financing to execute its plan to end phone subsidies, but it’s not the only one. MetroPCS and Cricket are already largely subsidy free, but they’re using financing to get expensive high-end devices like the iPhone into their customers’ hands.