Sprint May End Phone Subsidies

Posted by at 5:18 am on November 4, 2014

Sprint CEO Marcelo Claure said the company may scrap phone subsidies at some point down the road.

Speaking to investors, Claure noted that its installment and leasing programs are beginning to gather steam, which make the possibility of change much simpler. Historically, wireless network operators have subsidized the cost of handsets that are sold with contracts. Customers agree to a one- or two-year term in exchange for a reduced sale price for whatever device they choose. The carrier recoups the remaining cost of the handset over the term of the contract.

T-Mobile upended this arrangement with its Simple Choice plans, which scrap the subsidy in favor of monthly device payments. Claure said if Sprint chooses to follow this path, it won’t be until next year.

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