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AT&T to Make Users Wait Longer to Upgrade

Subsidizing new smartphones is costly for wireless carriers


AT&TWith technology makers unveiling flashy new smartphones almost every day, consumers often can’t wait to get their hands on the latest model.

Unfortunately for AT&T (T) subscribers looking to upgrade their current phones, they will have to wait four more months before the carrier will subsidize a new phone. On Sunday, the company said it would extend the waiting period between subsidized upgrades from 20 months to two full years for contracts that end after March 2014, the Associated Press notes.

Aio Wireless: AT&T Launches New Pre-Paid Cellphone Brand
Aio Wireless: AT&T Launches New Pre-Paid Cellphone Brand

Wireless carriers pay smartphone-makers hefty fees to subsidize new smartphones, recouping their investment through long-term service contracts with consumers.

For instance, Apple gets $600 from wireless carriers for each subsidized iPhone.

Earlier this year, T-Mobile (TMUS) adopted a contract-less service plan that allows consumers to buy smartphones and pay off the cost of the phones in monthly installments.

Shares of AT&T rose more than 1% in Monday morning trading.

Article printed from InvestorPlace Media,

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