AT&T CEO Randall Stephenson said on Tuesday that wireless carriers will move away from subsidizing smartphones. “When you’re growing the business initially, you have to do aggressive device subsidies to get people on the network,” Stephenson said at an investor conference.
“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.” Stephenson believes a shift to financing new devices — instead of subsidizing them — will be “transformative.” AT&T’s Next program offers no money down and 0 percent financing for new phones, and other carriers offer similar programs; Stephenson said this model is more sustainable.
