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AT&T CEO says big phone subsidies might soon be a thing of the past

AT&T Phone Sales Data Plans

It’s no secret that wireless carriers want your money, but in order to get their hands on it, they might have to get creative in an increasingly saturated smartphone market. At a recent investor conference, AT&T CEO Randall Stephenson said that carriers need to start thinking about how to get consumers to to sign up for data plans as opposed to how to sell them the newest devices, which is the strategy most carriers in the U.S. are employing right now.

“When you’re growing the business initially, you have to do aggressive device subsidies to get people on the network,” said Stephenson. “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.”

AT&T wants to keep its users on their phones for as long as possible before they upgrade, so it will have to change the mindset of the average technophile if it plans on doing that. The carrier just introduced a new set of data plans which will help many of its users save money every month, especially those with off-contract devices. In exchange for a more affordable plan, AT&T hopes to expand its customer base with initiatives such as AT&T Next despite the inevitable, approaching peak of subsidized sales.

“If you are a customer and you don’t need to upgrade your device, you can get unlimited talk and text and access to the data network for $45 all-in,” said Stephenson. “You can use your own device or finance it. I think this will be very powerful. It’s where we see the market going.”

Jacob started covering video games and technology in college as a hobby, but it quickly became clear to him that this was what he wanted to do for a living. He currently resides in New York writing for BGR. His previously published work can be found on TechHive, VentureBeat and Game Rant.