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Pre-Paid iPhone Service to be Available?

BoyGeniusReport.com has posted screenshots from AT&T's accounting system revealing new account codes for three versions of iPhone sales:

- iPhone PostPaid
- iPhone PrePaid (Pay As You Go)
- iPhone Hybrid (Pick Your Plan)

"PostPaid" is the traditional 2 year contract sign up method that most cellular customers, while PrePaid and Hybrid represent different PrePaid (no contract) plans that Cingular currently offers.

Cingular details the plans on their site:

Pay As You Go
Pay As You Go is wireless made easy. Simply pay in advance for what you need. No long-term contracts, credit checks or surprise bills - just all the benefits of wireless, with no complications.

Pick Your Plan
Get the best of wireless without long-term contracts or unexpected bills. With Pick Your Plan, you establish monthly automatic payments for service and use the balance on your account for voice minutes or other features. It's that easy.


The benefits are clear -- no long term contracts. However, subscribers of these plans must purchase phones at full price, without benefit of subsidies.

As an example, the most expensive phone available on the Prepaid phones from Cingular at present is the Motorola RAZR V3 which would cost you $199.99 without annual contract. In contrast, the same phone when purchased with a 2-year contract plan is Free (after $50 rebate). The deep discount is due to a subsidy paid by Cingular to encourage customers to sign long term contracts.

What gets interesting now is that Apple's iPhone is rumored to have tossed this business model out by not allowing the phone to be subsidized. This remains an unconfirmed belief, but this means the $499/$599 iPhone costs should be the same with or without contract. Readers have speculated that this would mean that iPhones would only be sold with contract. The unrestricted sale of iPhones without contractual obligations would more easily allow users to buy and unlock their iPhones for use on other networks.

By offering this option, AT&T/Cingular could lose revenue from individuals who might otherwise commit to a 2 year obligation, but Cingular is said to be giving Apple a portion of revenue from subscribers. Since details of the revenue sharing are unknown, it's possible that non-contract sales/revenue may fall under different terms making the pre-paid (no contract) plans (paradoxically) more profitable for Cingular.

Alternatively, these accounting codes may not mean anything and simply included by default or mistake in their accounting system.