Visitors look at Samsung devices at the Mobile World Congress in Barcelona, on February 24, 2014. (AFP PHOTO / JOSEP LAGO)
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The major U.S. wireless companies are doing just that.The U.S. wireless industry is in the midst of a shake-up, sparked by T-Mobile's decision in March to stop subsidizing phones bought by its customers. With subsidies, consumers typically pay $200 up front for a phone that costs $600 or more.Under that approach, customers save some money but are stuck with a phone for two years, which can be frustrating when a new model comes out just months or weeks later.By forgoing subsidies, customers aren't locked into contracts and can upgrade more frequently.The bevy of new phones could push even more U.S. customers into subsidy-free installment plans such as AT&T's Next, Verizon's Edge or Sprint's Easy Pay.T-Mobile U.S. Inc., which now sells all phones without subsidies, also lets people trade in phones early if they join a $10-a-month Jump program.Subsidies helped attract customers as the wireless industry grew.Ultimately, many carriers decided to end subsidies and charge for phones separately.In addition, subsidies encourage people to buy expensive devices because the overall cost is spread out, so getting rid of them could make cheaper phones more appealing.
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