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phones through carriers - why?

Discussion in 'The Lounge' started by mrqs, Feb 12, 2010.

  1. mrqs

    mrqs Well-Known Member
    Thread Starter

    there's loads of people here complaining about having to wait for their 1-2 year contracts to run out so they can get a new phone

    so is it just not possible for people in usa, uk and wherever else to buy a phone and get a mobile service contract separately?

    if it is, why don't people want to do that?

    thing is, i don't personally know anyone with a phone on contract (i'm in finland) and i just can't see any reason why anyone would want to do that instead of the alternative (well apart from ota updates maybe, but i don't see them as such a big deal)

    do you rent your computer from your isp?
    are you waiting for your contract with the cable company to run out so you can get a new tv?
    does the petrol station provide you with a selection of cars to choose from?
    no? so why do it with your phone?


  2. vandyblackandgold

    vandyblackandgold Well-Known Member

    Feb 7, 2010
    because in our free enterprise model society that we have, companies are allowed to charge WHATEVER they deem necessary for their said product or service.

    that being said, any reasonable smartphone, smart device would cost upwards of 5, 6, or even $700. so, in this instance, wireless providers offer huge discounts on products if you will sign a contract with them. that same $700 device now cost you as little as $100. here in lies the problem: whether you purchase the product without a contract ($700) or with a contract ($100), your monthly service price is the same either way.

    thus a decision has to be made....are you high and mighty enough to spend the extra $600 just so you dont have to be tied down to one carrier for a couple of years and can you put up with whatever gripe you have about your individual carrier because we all know that every carrier has their own set of complaints.

    i have been with verizon for over 10 years now and continue to sign two year deals with them every two years. while their customer service and the price of their plans are a little ridiculous at times, the playing field is even a little bit in terms of the best available carriers in my area and their pricing plans. i never have to worry about service issues or anything dealing with actually making phone calls or using data over their air, etc.

    until they really hack me off with something outlandish and absurd, i will continue to purchase my $700 devices for as little as free, with my upgrades.

    i dont necessarily agree with it, but thats they way it works here in the states.

    hope that answers your question!
  3. mrqs

    mrqs Well-Known Member
    Thread Starter

    well that pretty much sums it up - i thought the service providers added a monthly device fee to the contract

    so is it common for people to get a contract with a "cheap-expensive" phone, sell it and get another one not available from their service provider of choice?
    or are the phones locked to a specific sim rather than just the network? (still, is unlocking even a problem?)
  4. antipesto93

    antipesto93 Well-Known Member

    Feb 4, 2010
    is there no pay-as-you- go or 30 day contracts in the usa?
    like a 30 day contract where you can stop the contract whenever you want?
  5. Anthony1

    Anthony1 Well-Known Member

    Jan 5, 2010
    Luton UK
    Actually when TVs first came out most people rented them, same with video recorders, fridges and washing machines. The high cost of these new high technology devices meant that most normal people couldn't afford to buy outright so they rented. It was very common at one time. It wasn't until prices fell dramatically that buying outright became the norm.

    Similar situation with mobile phones. When they first started to become widely available to the public sometime around the mid 90s they were pretty expensive bits of kit, and many people at the time couldn't see why they'd need one...heck we'd lived our entire lives without mobile phones, why do we need one now.....and none of our friends had one anyway :)

    So the mobile phone companies gave them away free if you signed up for a contract with them, of course they weren't really free, the cost was added to the monthly contract, but the 'up front cost' was effectively zero for the phone. This made mobile phones far more desireable and affordable at the time. I'd be surprised if that wasn't the case in Findland in the mid 90s too.

    This business model has just stuck because it suits the phone companies to get us in to contracts and it suits many people to get an expensive handset without paying a hefty price up front for it.
  6. mrqs

    mrqs Well-Known Member
    Thread Starter

    so do you actually prefer this system you have or would you rather buy a phone for a relatively high price and have a possibly slightly cheaper monthly plan that doesn't marry you for a certain period of time?

    i guess people like what they are accustomed to - are there any people from contries where both of these systems are popular?
  7. Ubizmo

    Ubizmo Active Member

    Feb 9, 2010
    In the US, if you get a monthly plan without contract, it will generally cost more than what you pay under contract. If, however, you're under contract and your contract runs out, you'll continue at the same cost from month to month. Consequently, at the end of a 2-year contract, many people get interested in buying unlocked phones, so they can continue with their current plan, but have the option to switch to another carrier if they see an attractive deal.

    When your contract is over, or nearly over, your carrier becomes keenly interested in getting you into another one, so they tend to offer attractive discounts on new devices. I'm in precisely this position now. I've been with T-Mobile since 2003. My most recent 2-year contract ends in April. To my surprise, the T-Mobile web site says I'm eligible for full discount on a new device now. I called and asked about that, and was told that it's a reward for being a "loyal T-Mobile customer" since 2003. Maybe, but they also know that in April I'm free to jump over to AT&T and get an iPhone, and I'm sure they lose a fair number of customers in just that way. But if they can get me to succumb to the temptation to upgrade now, they have me for another two years.

  8. vikingisson

    vikingisson Well-Known Member

    There's all sorts of historical reasons why we're in this situation. What I'm interested in is how to change the future so that I can pay less for service if I bring my own phone. Almost no carrier over here has a lower price if you aren't being subsidized for the phone. I think one carrier does but I don't live there.
    However, when you do as most people do and sign up for the contract and the discounted phone you are generally limited to what plans you can buy. You generally have more freedom if you're only buying a service plan, the actual phone is none of their business unless you want phone specific services (BB?). You're going to pay for that phone one way or another.

    In Canada we're in a very ugly situation with 3 year contracts, very high plan costs, insane roaming costs, nickel and dime costs for everything, locked down crippled firmware, and you might get locked out if they smell a rooted/updated device. I've learned my lesson (after not having a cell phone for years) and I'll never again do a contract phone or a 3 year contract. Even if the plan cost is the same and I have to buy my own phone it is a better value to have a tiny bit of freedom and choice.

    I have no interest in trying to get legislation to fix this broken industry since the fed's self interest is in the status quo. But if enough people start opting out of contracts and whatever phones they offer it just might change the industry as providers will have to earn our loyalty instead of demanding it with that piece of paper. It might look like the same money or more but in the long run it is cheaper IMHO. Why is it that over here buying an unlocked phone is a gray market activity with lots of doubt and shadowy characters but in other countries you walk into a nice phone store and get exactly what you need and then go to another store to buy a service plan/SIM? Propaganda and FUD rules the day.

    (wish I was in Finland even with the slightly arrogant attitude)
  9. Pitamakan

    Pitamakan Well-Known Member

    Jan 15, 2010
    Bozeman, Montana
    Personally, I would LOVE to see the end of the multi-year contract model for cellular service marketing in the US ... it would certainly increase the diversity of phones on offer, and might instill some real price competition for cellular service, as well. But aside from some niche markets, I don't see it happening ... for some insane reason, America likes its corporations to be all-powerful, and the corporations like it the way it is.
  10. bbrosen

    bbrosen Well-Known Member

    Dec 3, 2009
    I wish we had a choice, to either bring your own phone and get a month to month contract, or get a subsidized phone and pay for it with a longer locked in contract. Best of both worlds. I think that the carriers are not willing to give up the status of being special, ie they put their own software onto these phones which i hate, it's usually bloated useless crap, just so they can brand it as theirs. They are unwilling to just become the pipeline, so to speak and let the phones and their OS software come from the manufacturer. that way updates could be universal and more readily available to all who purchase said handsets, and can hop between providers if dissatisfied with the customer service, or cell service.

    With the new age of smartphones we are seeing, I am pretty sure the carriers will ultimately not want to have the burden and expense of constantly updating and testing every new OS level and upgrade for each and every handset maker, everytime.

    It would be nice with Android, to just go to your google page and plug in your phone and download the upgrade, reboot and be done, no fuss no muss.
  11. bbrosen

    bbrosen Well-Known Member

    Dec 3, 2009
    some carriers will let you bring unlocked phones and use them, but they still make you sign a contract. there are pay as you go companies here in the US, but the phones are not smartphones. Even when you are in a contract with a company, you can still purchase, for full price, a new phone. Also, carriers here are a mix, some cdma platform, others gsm, so not all phones work on all carriers. My carrier will not activate any unlocked phone on their network, just what they desire, i don't like it but my service is paid for by my company, I just buy the phone, so that is why I am with them now. Great coverage, 3G every where, but lousy phone selection. The HTC Hero is their first and only android phone so far. The nexus looks great, wish i could get it.
  12. Ghâshûl

    Ghâshûl Well-Known Member

    Dec 28, 2009
    It seems weird that the monthly fee would be the same with or without a contract.

    Here you can buy it unlocked and use on any carrier, or you can buy with a 6 month contract. Usually you can choose between different down payments, and will have a minimum monthly fee for the remainder of the contract.

    For instance, for a Hero from one company:
    pay 1499kr now and 275kr for 6 months = 3149kr total
    pay 1299kr now and 325 for 6 months = 3249
    pay 899 now and 399 for 6 months = 3293

    The monthly fee is the minimum, but it goes towards usage, so basically you save a lot compared to buying it unlocked, because you can buy it unlocked for 2999, but that of course includes no subscription, that you'll have to pay on top.

    If you don't need a smartphone, though, it can be quite cheap to buy a normal unlocked phone and use a discount carrier.
  13. IOWA

    IOWA Mr. Logic Pants

    Dec 2, 2009
    Network Admin
    yeah.... bring your own device would be nice... and i think the trend shift has already begun with the unlimited prepaid plans from the mvno's (boost, cricket, virgin mobile etc). all they need is some high end phones on these mvno's and it will take off. i know most of my dumb phone using friends have switched to one of these. it is also sparking competition amongst carriers. you cant deny 25/mo for unlimited talk/text is a great deal. and as 4g rolls around with voip, i think it is really going to take off. contracted business models days are numbered IMO
  14. Distroid

    Distroid Member

    Apr 13, 2010
    Missouri, U.S.A.
    I really hate being the kinda guy to say this crap, but I actually work for them, so it's a matter of pride in my work....

    But, uh... Cricket is not an MVNO... They are a provider.
  15. shawn1224

    shawn1224 Ex CEO-DNPSEA foundation

    Dec 10, 2009
    Houston, TX
    Tmobile offers month to month with their even more plus plan. I paid for my phone outright (Mytouch3G 1.2 - $400) and I'm able to choose from a vareity of plans that don't tie me down for 2 years.

    At the moment I'm paying $69.99 for the Even More Plus 1000 Talk + Unlimited Text + Unlimited Web ... Nights & weekends are free

    Works out great for me cause I rarely use over 600 mins a month and I can leave whenever I want to.

    BTW - the plans are cheaper than being tied into a contract but not by much
  16. TheBrit

    TheBrit Well-Known Member

    Aug 25, 2009
    O2 in the UK have a 'bring your own' phone contract called SIMplicity. It's cheap and has a 30 day notice period. For

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