Higher data usage and new markets expected to increase profits going forward

AT&T knows that it can't keep providing subsidized devices to customers forever. Speaking at an investor conference in New York, CEO of AT&T Randall Stephenson explained that with smartphone adoption at 75 percent and rising, the cost of offering devices on subsidies just isn't financially viable. Just as we've all seen, carriers in the U.S. have been offering handsets for little or no money on-contract to drive smartphone adoption rates, but now with so many people buying expensive phones it's starting to take a toll.

New "Mobile Share Value" plans that give you a $15 break in your monthly bill for bringing your device or keeping one past two years is the first indication of this realization, but so are AT&T's increased prepaid efforts. Between its own GoPhone brand that has increased data allowances at reduced prices and acquisitions of other prepaid brands like Leap, AT&T plans to continue moving down market with smartphones to increase its subscriber base.

The nation's second-largest carrier doesn't intend to just lower rates and take a cut in profits, however. Stephenson explained that a decrease in the standard monthly price of having AT&T service will be made up in the long run with higher data usage on tiered plans, as well as moves into new markets like home automation and automobiles. Not to mention its new device financing plan, AT&T NEXT, which lets customers buy new phones without a subsidy.

Source: CNET


Reader comments

AT&T CEO knows device subsidies are going the way of the dodo


Left unsaid is if this will apply to existing accounts, or if you have to start a new plan.

My last two phones I purchased from other sources, but am still paying the same fee I was when I bought an Iphone from them back in 2008.

They seem to be very good at screwing their existing customers while offering incentive to new customers.

They just started the value plans. Maybe that'll save you money. But you should have unlimited Internet with AT&T and I would just keep that and complain about not being able to use up unlimited data fast enough.

Posted via Android Central App

At@t sucks monkey balls period especially those crappy data plans.

Plain and simple nothing beats Tmobile period.

Posted from my Galaxy Note 3 on Tmobile via Android Central App

Not if you live in Texas :) I live in Northwest Austin and can only manage 2g on T-mobile in my driveway.

Actually Richard, in San Diego County Sprint, ATT, and Verizon beat T-mobile. I know, researched carefully since I seriously evaluated switching from Sprint to T-Mobile.

Richard Yarnell, you have a nasty obsession of making unsubstantiated all encompassing blanket statements that serve to obliterate any credibility and irritate people. There are NO ABSOLUTES.

Yeah, the Find a T-Mobile store doesn't even extend far enough to work for me. It's either Verizon or a cold lifeless brick that I talk at.

Posted via Android Central App

T-Mobile is objectively a better value than the other carriers. I don't understand how you can argue against basic math. I've been with T-Mobile for over a year and I'm perfectly fine with them even thought most of the time I have 2G coverage. Why? Because I freaking pay $30/month for unlimited data.

Posted via Android Central App

I have Wifi, at work and at home. I don't need Unlimited data, and my phone bill is

280.00 monthly for 7 lines, unlimited talk, text and 20GB of data. That's more than enough, since my in-laws don't use data (always on wifi), my teenagers have a 3GB cap each, that I CONTROL, and my wife is always on WIFI.

Add to that, Tmobile doesn't work inside my office, or my wife's office, and there are many MANY reasons to go with a different carrier.

Ummmmmmm....Consumer reports JUST rated cell phone carriers in the major markets, where San Diego was one of them. T-Mobile and Verizon were the highest rated and tied for #1. If you're going to retort something, at least get your facts straight.

Consumer Reports is good at rating canned peas and toasters.

Anything the least bit technical and all you get is biased opinion from those guys. They have gotten steadily worse in recent years.

Sorry Richard T-Mobile is one of the weakest here in Virginia Beach. So everyone beats T-Mobile here even sprint in some areas. At&t lte pulls around a constant 45-50 mbps except at my base where our radar jams the band at&t operates on.

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Radar on his base? I'd say definitely military... unless his couch fort has radar.

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Please. For every carrier that you've been on and every manufacturer whose phone you've had, you've said all others "suck monkey balls" or are getting "pimp slapped". I'm convinced if you were on Cricket, Simple Mobile, Straight Talk, or any of the other smaller, regional carriers, that you'd say they were "boss" and all others "suck monkey balls". What a joke.

2 lines 10 GB $150 is not too bad.
That's what I'm eyeing as soon as my contract with sprint is up.
That's what i pay sprint now so might as well pay that for good coverage.

Really? 50$ per line unlimited with Sprint is much better

So where is the competition for the Note 3? Oh right there isn't any...

Sprint's data speeds are painfully slow in most parts of the country

Posted via Android Central App

3 lines, corporate discount, unlimited is the norm here.

Lte is great where I am

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Shit man. If I'm ever in a good Sprint coverage area, then I'll give it a look. Thanks.

Posted via my "Gift from God" Nexus 5

I am not gonna lie, it is good lte all around me, but it is not going at 25. Mine hovers around 10-15 and buildings kinda suck.

It is no Verizon but it isn't tmo(in my area I am lucky to see 2) either.

It is certainly worth it to me because I go through 30+ gb per month myself...

No tethering

When spark hits, and around here it will be soon since sprint doesn't do the upgrades here, then it should hit Verizon speeds

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

10-15 mbps is what I'm seeing on T-Mobile and is nothing to sneeze at. As for Verizon data speeds, the only people seeing those crazy speeds, now, are people that don't live in "saturated" markets.

If Sprint doesn't do the upgrades to the towers in your area, who does?

Posted via my "Gift from God" Nexus 5

I cannot remember the name of the company(I will look it up) but they are a small subsidiary of Sprint that handles the upgrades and corporate stores from the top of Virginia to the top of PA and over to Philly.

The upgrade schedule was very aggressive and they met it. The one corporate store experience I had was decent, but not fantastic.

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

The name of the company is Shentel

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Ok, cool. I appreciate you taking the time to look that up, brother.

Posted via my "Gift from God" Nexus 5

Even with 18% corporate discount my bill comes out to $130 plus taxes and fees so like $145. Factor in Corporate discount on AT&T and I'm at $135. That's a great deal IMO. I lose unlimited but I never use more than 10GB so I'm fine

Posted via Android Central App

About 50% of my data use on Sprint last month was on LTE, I only know this because they break it down between 3G, LTE, and roaming on the bill, which I just paid.

I was actually surprised it was that much, not because LTE around here isn't being rolled out fast (it is), but because there's still no LTE at home (inside my room at least) and because just two months ago there was still a big LTE hole around my work (whole area was lit up recently tho, one the few big holes left in Puerto Rico).

3G speeds have improved too... We're not even a Spark market, yet. Honestly, if they manage to do this good a job elsewhere they'll be in pretty good shape by next year.

T-Mobile has 2 lines truly unlimited everything for $120 per month or 2 lines unlimited everything with 5GB 4G for $100 per month.

Posted from my pure Google Nexus 4 using the AC app.

That's pretty damn good. I'll see if I can get my brother to switch.

Posted via my "Gift from God" Nexus 5

More of us need to say "screw you" for him to get the message, apparently. No contracts and prepaid plans for me forever. More are learning.

Posted via Android Central App

This only means something if the carriers add more value to their rate plans, meaning charge less.

US customers still don't get that handset subsidies are built into the current pricing model.

I can already see vzw and att going away with handset subsidies and contracts and then overcharging for phones and rate plans

Subsidized flagship phones on Sprint unlimited are the best deal based on total cost over 2 years. People who don't understand can't do simple math.

$600 / 24 months = $25 per month value to one's contract plan. Moreover, with contract plans one can elect to add Total Equipment Protection insurance which comes in very handy when one breaks or looses their $600 flagship smartphone. TEP also comes with free replacement of malfunctioning handsets. Seen plenty of people using shattered screens, haven't we?

In fact, the premise of this article supports my comment.

I'll completely agree with you, once Sprint's network is on-par or better than Verizon's and AT&T's.

Posted via my "Gift from God" Nexus 5

Incorrect. Maybe if you only factor in cost would your argument be correct. However, a good deal constitutes much more than just cost. Tmobile has an excellent plan in which the ten dollars you pay for the ability to upgrade every six months includes insurance. Not to mention the have the most flexible plan of any carrier and where they support LTE speeds, they are the best as well. Sprint, in my opinion, is the worst deal in the United States as it currently stands.

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You're trying to make me laugh, right? Who in his right mind would sign a contract with Sprint? Please tell me you aren't serious.

Posted via Android Central App

No one would root for the Cubs either but everyones experience and preferences are different.

Sprint in Chicago may suck (not my experience recently, but whatever) but here in PA it is good.

Well if US carries really would offer such good deals on phones in the first place. I remember getting an S4 right of the get go 1 euro on a 24 month plan with a rate of 40 euros a month plan. Hmm that is good but 200 300 on a phone plus a around 100 dollar a month plan over 24 month is ridiculous.

Posted via Android Central App

Yeah, the carriers here in the USA charge waaaay too much. They overcharge you for their service and they're complaining about subsidizing phones? What a joke

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What does your plan offer? Mine offers everything I need for $30 (just over €20) per month.

Posted from my pure Google Nexus 4 using the AC app.

Does offer everything but also u can basically get every phone for 1 euro unlike u do in the USA where u already pay way to much for the phone on a 2 year plan plus the expensive plans on top. I didn't even get myself a subscription here in the USA because it is ridiculous what u pay and how much still the phones are on a 2 year plan. By the way that is for non simlock non branded phones that also can use tether with no issues. In the USA u get those nice carrier branding plus simlock plus WiFi tether only works when specially paying for it. Ridiculous. So u pay more on plans in the USA and way more on phones that a crippled with simlock carrier branding and blocked WiFi tether. Sweet and the carriers Stoll complain after already ripping ppl off and offering half assed crippled hardware for expensive. Cool.

Posted via Android Central App

And this is why I will be buying Nexus phones for the foreseeable future.

Smartphones have definitely hit a plateau. I mean, when you start seeing phones like the LG Flex and the Sammy Round, you know companies are looking hard for ways to make you want to upgrade.

Posted via Android Central App

No, that is a tech advancement

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Oh yeah? Well, my phone levels up faster. Therefore, my phone is badder.

Posted via my "Gift from God" Nexus 5

The only two things that are badder are the camera and the battery


My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Nah you da man

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Well, let's hope that Nexus devices remain cheap for the foreseeable future.

Yeah, the only way to move up from here is to different form-factors.

Posted via my "Gift from God" Nexus 5

Nexus is getting very close. To being the go to phone.

People give a tin of credit to Tmo for movement between carrier offerings and pricing, but it is really the Nexus phones that deserve the credit.

High end phone that you can move between 3 carriers on a month to month basis. That my friends is the carriers worst nightmare.

Bring on the Nexus Note with spen features and a camera

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Nexus Note would be nice. I don't think Samsung or the carriers would like that too much, lol.

If these world chips mean anything, then we may have true world phones in the near future. I'd love to use the service of a carrier that hates unlocked devices (looking at you, Verizon).

Posted via my "Gift from God" Nexus 5

Galaxy Note 3 GPe (with stock android with added on S Pen functionality)? :)

Posted from my pure Google Nexus 4 using the AC app.

Need the camera software to go with it THEN it's a dream phone

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

I am no photographer, that is why I need better software and hardware to take a decent shot.

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

There should be an AOSP ROM that has the TouchWiz camera. There was one for the S4. Can't remember the name :(

Posted via Android Central App

There was one for the SGS3 so I would imagine there was one for the 4. Never was a huge fan of AOSP so I didnt stay on it for more than a few weeks.

Paranoid Android though interests me, CM seems a bit...hacky...

The Nexus 5 really hasn't gotten enough credit for supporting voice, 3G, and LTE across three major carriers... If next year's model manages the same feat they'll be building a lot of momentum for the brand.

Bar none one of the top three reasons I got mine, and I'm happy with Sprint, but hey... Contract ends next summer, keeping my options open and/or being able to test other carriers at will is a dream IMO.

I'm currently a Sprint customer on a family plan with four lines and with the no contact discount, that makes AT&T a cheaper option for me... We're making the switch at the end of the month.

Posted via Android Central App

Your going to have to go back on contract and tiered data

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

We are bringing two Nexus 5 and two Moto G phones, no contact on mobile share plans are now discounted$15 per phone, which makes it cheaper than Sprint.

Posted via Android Central App

I haven't done any shopping around since I switched.

Tiered data wouldn't work for me in any case

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

The bonus is that AT&T's hspa+ is typically faster than Sprint's LTE. Plus much better coverage than Sprint.

Posted via Android Central App

They are the same here for the most part

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Only ATT could get away with saying "we expect profits to rise because we are tricking people into sharing rediculously overpriced data plans".

T Mobile is looking better and better to me

I have seen so many articles about how AT&T Wireless has changed. It is funny since about a month ago I cancelled my service with them since I just use unlocked devices, the sales representative offered me $15 off for three months to stay. Compared to the $30 T-Mobile Walmart Plan nothing really comes close.

Well... unless you need to make more than 100 minutes/month in phone calls.

I use the $30 T-Mobile plan, too, but to compare it directly to plans with unlimited calls is a bit of a misnomer.

A better comparison would be T-Mobile's $60 2.5GB prepaid plan, AT&T GoPhone's $60 2GB plan or Straight Talk's $45 2.5GB plan.

Or Sprint's fully unlimited (calls AND data) $60 no contract plan?

I don't understand why they hide that plan under the rug, specially after the Nexus 5.

Are you talking about prepaid? There was a catch to that I thought... Can't remember what it was though....

Perhaps I'm wrong. But aren't we actually paying for those phones in the long run. Yeah, there may be little or no money up front, but the price of the phone is in the monthly bill that we pay each month. Which is the reason why a contract is required.

From the story it almost sounds like the phone companies are giving us phones which isn't the case.

Perhaps when they had the one year contracts they may have been loosing some cash, but I seriously doubt that is the case. You don't get as large as Verizon or ATT by losing money.

Yeah but the problem people have is that when the 2 years are up, the price stays the same.

With the new plans, the cost goes down and the payments are interest free

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

Right, but that's a recent development. For years AT&T (and the rest) was offering 12 month contract renewals, and even at 18 months it wasn't really financially viable to keep subsidizing.

Now that they've pushed all the way back to 24 months for upgrade pricing its a bit more of a wash ... but they can make even more money if you finance with AT&T NEXT or bring your own device and just not burden them with the issues of buying devices up front and reselling them to customers.

+1,000,000 to the first comment here. Can't quote him directly :(

Posted via Android Central App

I worked as a technical and warranty Android agent for a year for att. Unless you got someone educated about smartphones you were screwed. Idk how att even stays afloat with all the customer service bs customers get.

Posted via Android Central App

Cost of a Note 3 $725
$80 a month for 24 months $1920 (2GB plan with off contract $15 discount)

$725+$1920=$2645 off contract

Cost of a Note 3 with 2 year contract $299
$95 a month for 24 months $2280 (2GB plan without $15 discount)

$299+$2280=$2579 on contract

Same phone
$2645 for phone and service after 2 years off contract
$2579 for phone and service after 2 years on contract

Where is the savings?

See, if I were purchasing a Note 3 off contract, I'd elect for GoPhone over a contract plan.

Note 3 = 725

GoPhone = 60*24 = 1440

1440 + 725 = 2165

A bit more savings than the other two, for sure. The disadvantage to this approach is obviously paying for the cost of the phone upfront, though.

Posted via my "Gift from God" Nexus 5

As you point out its just about break-even for someone who buys a phone on-contract every 2 years exactly. The $15 discount for BYOD is slightly less than the average ~$18-20 that the carrier is actually subsidizing, but you can understand that they're hedging a bit in their own favor there.

Where this is important is that if you don't upgrade again at the end of 2 years exactly, your monthly bill goes down by $15 when you keep that phone. Not to mention that you can finance now with AT&T NEXT, and if you choose to go with a cheaper device you can probably come out ahead.

Of course the real savings come from leaving AT&T altogether, but this is a great option for family plans (well, 2+ people really) where prepaid doesn't actually provide a better value in most cases.

Yes this really helps people with 2+ phones. I was ecstatic to see this change as I was told a few months back at an AT&T store that this was coming. I also have a 24% corporate discount. So I just dumped the seriously overrated grandfathered unlimited data and now am paying $91.80 for 2 phones with unlimited talk, text, and shared 2gb of data with my wife who is a stay at home mom (on WiFi all day).

Posted via Android Central App

I have the solution for ALL carriers, they'll never do it though, it makes too much sense and is too fair to the customers.

Unlimited Talk, Text & 2GB data - $45/mo - BYOD

Unlimited Talk, Text & 2GB data - $45/mo - Buy phone for full price

Unlimited Talk, Text & 2GB data - $45/mo + $25/mo (for 24 months) - Subsidized phone (up to $600 max credit)

5GB additional data - $5/mo

Unlimited data - $10/mo

There, problem solved.

I love how they basically tell you how they're gonna rape you with fees, cause they know that most people are just gonna go along with it.

Yeah, currently on this plan and loving it. Although, I am always shopping around for a cheaper wireless bill.

I'd honestly switch to Virgin Mobile, if they allowed unlocked (or Sprint) devices onto their network.

Posted via my "Gift from God" Nexus 5

Yeah I could care less as long as there is lte and unlimited data.

I know everyone raves about hspa but for one it sucks here on tmo and two it will not advance much.

Advanced lte is around the corner and hspa will go away like iden

My phone can beat up your phone. It's bigger, badder and has more moves. If worse comes to worse, it also comes with a sword.

If only Randall Stephenson would go the way of the dodo.

Look at the new plans that correspond to the discount. AT&T is going to give you $15 with one hand and take $30 with the other.

Except at this point he's not doing that. AT&T is just giving you a $15 discount for bringing your own device, financing one or going out of contract. There's no other rate hikes anywhere.

Complain when the rate hikes in other places come, but you really can't complain about it before it happens...

Yes well glad to know that there will be no cut in profits for the company....a company whose CEO pay is over 500 times the hourly rate of the average company employee. Record company profits...Record CEO pay, Stagnant middle class salaries. But hey....we don't need those subsidies anyway.

He is either ignoring or oblivious to the fact that the lack of a subsidy is a good thing for the customer as well. If all of the phones on my account are purchased unlocked/off-contract, then there's nothing keeping me with the company for two years. The moment the company does something to piss me off, I can port my numbers over to another carrier provided they have good coverage in the area and not have to worry about early termination fees or buying a new device when I switch.

my main issue with this whole thing is, with advancements in what a phone can do and faster data speeds, phones use more and more data, they take away unlimited and add in tiered data rates. Even if one is grandfathered into an unlimited plan on ATT after 5gbs they throttle the speeds so bad you can hardly use the phone. I pay for data service, I get great speeds, but I have to watch my data usage and use wifi or my phone out and about is slow. This is absurd, we allow companies to run this way.