But the reign of cellphone subsidies could be ending as customers demand more flexible mobile plans, forcing wireless carriers to look for alternatives to the long-standing practice.
AT&T Inc. hinted this month that it was considering doing away with phone subsidies. Chief Executive Randall Stephenson said subsidizing a smartphone every two years was an expensive undertaking that he didn’t think the company could afford.
Subsidies were originally intended to lure people onto a company’s wireless network with the promise of a cheap phone. With so many customers owning smartphones nowadays, Stephenson said, such incentives may no longer be necessary.
Some customers have balked at the notion of paying for a phone’s full retail cost, which is often hundreds of dollars more than the subsidized price.
But analysts said cellphone subsidies were a myth and that without them, consumers could end up saving money.
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