Cellphone Subsidies Past and Present
Back in the ‘90s, in my earlier days in the wireless industry, selling phones was a profitable hustle. I’d buy an Ericsson 318 for $220, give it away “free” with a new activation, and still make money. How? My $400 commission covered the phone’s cost, leaving me with a nice profit. Fast forward to 2025, and the wireless game has changed.
The Ericsson 318, a classic ‘90s phone I sold back in the day.
The Contract Era: “Free” Phones Galore
In the ‘90s, a typical AT&T plan cost $39.99 for 450 minutes, plus $10 for 1,000 texts and $30 for smartphone data—about $79.99 total. The phone? Often free or $0.99, thanks to carrier subsidies baked into the plan. Cancel early, and you’d face a fee—like AT&T’s $325, prorated $10/month.
Today: Installments and Transparency
Now, carriers like AT&T have ditched contracts for unlimited plans bundling talk, text, and data. A $600 phone costs $16.66/month for 36 months on top of your plan. Cancel early? You owe the remaining phone balance—no termination fees, just hardware costs. Once paid off, that extra payment drops—unless you upgrade again.
Promotions and Business Perks
Modern subsidies come as trade-in promotions or bill credits, especially for AT&T business customers. Trade in an old phone, and you might get $1,000 off a new device over 36 months. Some businesses can still access 2-year contracts, but most choose installments or upfront purchases for flexibility.
Comparison Chart: Contracts vs. Installments
| Feature | Old Contract Model (90s) | Modern Installment Model (2025) |
|---|---|---|
| Phone Cost | “Free” or $0.99 (subsidized) | $16.66/month for a $600 phone (36 months) |
| Plan Cost | $79.99/month (450 min, text, data) | $60/month (unlimited talk, text, data) + phone payment |
| Cancellation Penalty | $325 ETF, prorated $10/month | Remaining phone balance due |
| Contract Length | 2 years | No contract, 24–36 months for phone payments |
| Promotions | Rare, tied to contract | Trade-ins, bill credits over 24–36 months |
Why It Matters
Whether you’re a business managing multiple lines or an individual eyeing the latest device, understanding subsidies saves money. For Tampa Bay businesses, I can help you navigate AT&T’s plans, trade-ins, and upgrades to optimize your wireless setup.
Need expert wireless advice? Contact Curtis Matthews, AT&T Wireless Consultant for personalized solutions.