Reply With QuoteRight now there are about 50% of the USA population ATT and other carriers desperately want to convert to higher paying smartphone data customer.
The biggest barrier to smartphone adoption is clearly "data" plans.
So ATT and Verizon have to come up with a price point for family data that is profitable and at the same time attracts "value" to convert those remaining dumb phone customers to smartphone data users.
And there lies the big problem. If ATT can convince users to get a Lumia 900 which they cleary subsidize much less than the $400 or so for the iPhone, than they can attract users with a cheaper family data plan. However, if 70% plus of their user base all get the iPhone (this data is true...70% of ATT customers get the iPhone). If that's the worst case, than ATT's got huge problems trying to maintain profit margins.
And that's the key with carriers, maintaining profit margin and even trying to grown them. Right now, profit margains are decreasing. Sure they are still making billions. But they want ot make more. It's just simple business 101.
Now lets do the math.
Right now, if a family plan consists of 5 lines (say 3 iPhone $30 lines) and 2 dumb lines which have no data. That line will run (69.99 700 minutes with rollover, plus $30 text, plus data ($30X3). The montly bill is $210 before taxes/discounts. That averages out to $42 per line
Now, if the family plan consists of 5 smartphone lines. What price point is profitable to beat that $42/line currently. How does ATT convert those 2 dumbphone into smartphone lines?
Remember a dumbphone, ATT might only subsidize about $100-150 for a flip phone. But an iPhone will cost ATT $400 in subsidies. So the subsidies for getting those 2 extra smartphone lines ends up costing ATT $300 extra per line.
So ATT not only has to try to maintain revenue, but the revenue needs to make up for the additional $600 it costs ATT to convert those two remaining iPhone lines into data lines.
Honestly, the only way this will work is ATT starts mandating DATA (like T-mobile USA does). That means if you buy a subsidized iPhone on contract, you cannot just switch to a dumb phone and sell the phone or swap the new phone into another line. That line you just got upgraded must be forced into a data plan for 24 months.
And I think that's what ATT will be forced to do. They may try to just say if you buy phone at full price, than no data plan is needed. But if you try to buy phone at subsidized pricing, than 24 month contract includes data.
Than they can tie all the required data into a family data plan and make it work.
Originally Posted by aneftp
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