AT&T CEO: We can’t afford to subsidize smartphones indefinitely

Consumers love being able to upgrade their smartphones every two years with affordable, subsidized pricing. US$199 for a brand new iPhone? Sure, sign me up. Some carriers like Sprint even offer early upgrades after 18 months, all in an effort to keep subscriber churn to a minimum.

AT&T’s top executive says the era of big subsidies for devices is coming to an end, as wireless operators can no longer afford to fund a constant smartphone upgrade cycle. Speaking at an investor conference in New York City on Tuesday, AT&T CEO Randall Stephenson said that with smartphone penetration at over 75 percent and soon reaching 90 percent, wireless operators need to work harder to get customers to use more of the network rather than simply getting on the network.