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MacRumors
Jul 18, 2013, 11:46 AM
http://images.macrumors.com/im/macrumorsthreadlogo.gif (http://www.macrumors.com/2013/07/18/verizon-officially-announces-edge-frequent-device-upgrade-program/)


In line with a leaked document (http://www.macrumors.com/2013/07/15/upcoming-vz-edge-program-may-allow-no-contracts-and-earlier-upgrades-for-verizon-users/) from earlier this week, Verizon today announced (http://news.verizonwireless.com/news/2013/07/edge-device-payment-early-upgrade.html) the upcoming launch of its new "Edge" handset upgrade program. Similar to AT&T's "Next" program (http://www.macrumors.com/2013/07/16/att-rolls-out-new-att-next-smartphone-and-tablet-upgrade-program/) introduced earlier this week and T-Mobile's "Jump" offering (http://www.macrumors.com/2013/07/10/t-mobile-announces-jump-phone-upgrade-program/), Edge is designed to allow users to upgrade their handsets more frequently.

http://images.macrumors.com/article-new/2013/07/verizon_edge.jpgHere's how it works: Choose the phone you want and sign up for a month-to-month service plan, it's as easy as that. The full retail price of the phone will be divided over 24 months and you'll pay the first month at the time of purchase. If you want to upgrade after 6 months, just pay off 50% of the full retail price of the phone and you can choose a new phone and start all over again.

There are no long-term service contracts, finance charges or upgrade fees with Verizon Edge. Every six months, as long as 50 percent of the cost of the phone has been paid, you can upgrade to the newest basic or smartphone available.According to AllThingsD (http://allthingsd.com/20130718/verizon-looks-to-edge-out-competition-with-six-month-upgrade-program/), customers must also trade-in their existing handsets in order to upgrade under the program. Verizon's Edge program launches August 25 for customers on the carrier's Share Everything plans.

Article Link: Verizon Officially Announces 'Edge' Frequent Device Upgrade Program (http://www.macrumors.com/2013/07/18/verizon-officially-announces-edge-frequent-device-upgrade-program/)



Christian 5G
Jul 18, 2013, 11:47 AM
Ok

jaykid007
Jul 18, 2013, 12:03 PM
Tmob jump is better.

BreuerEditor
Jul 18, 2013, 12:04 PM
What am I missing? You pay the phone's price over 2 years (so let's take an iPhone worth $700), and you're paying $350/year, but in order to upgrade in 6 months time, you have to fork up the total $350 price tag AND trade in your phone...so essentially, you're renting a phone, but if you keep it for 2 years, you've paid it in full and you STILL have to trade it in?? :confused::confused::confused::confused::confused:

medi.freak
Jul 18, 2013, 12:14 PM
delete

Millah
Jul 18, 2013, 12:15 PM
Honestly, one of the biggest scams I've seen ATT and Verizon try to pull. Their service plans are already artificially inflated to account for device subsidies. So add MORE on top of that, and it would already be a complete scam. But the real scam is that you are essentially renting the phone, since you'd have to give it back when you want to upgrade on top of having to pay half the phones price.

Wow, they've hidden their scam in something thats so convoluted and confusing that the average person just wont read between the lines. Absolutely digusting, one of their slimiest tactics I've seen yet from the two big "orifices" in telecoms.

Tmobiles is much more straightforward and honest. Realistically, you're just better off BUYING your phone and then RESELLING when you want to upgrade.

I hate the carriers

Jimbo47
Jul 18, 2013, 12:27 PM
Honestly, one of the biggest scams I've seen ATT and Verizon try to pull. Their service plans are already artificially inflated to account for device subsidies. So add MORE on top of that, and it would already be a complete scam. But the real scam is that you are essentially renting the phone, since you'd have to give it back when you want to upgrade on top of having to pay half the phones price.

Wow, they've hidden their scam in something thats so convoluted and confusing that the average person just wont read between the lines. Absolutely digusting, one of their slimiest tactics I've seen yet from the two big "orifices" in telecoms.

Tmobiles is much more straightforward and honest. Realistically, you're just better off BUYING your phone and then RESELLING when you want to upgrade.

I hate the carriers

Even if you buy the phone at full retail you still are being ripped off because your bill for each month stays the same. So you buy the phone at full retail, yet are still paying for it in the bill. With that said, I will probably be one of the many people who use this program even though I know im being ripped off. I can't afford to pay full retail for phones, and the carriers know this. I think the carrier is only benefiting if the customer waits more than 12 months to trade their phone in. That way in 12 months you basically paid for the full price of the phone. On the 13th month, you are now paying more than what the phone is worth.

Waxhead138
Jul 18, 2013, 12:28 PM
Tmob jump is better.

Not exactly....it all depends. With TMobile and Sprint, the reason they typically give everything away for a better rate is because it works in soooo many fewer places (overall.) That's been one trade off between those two and VZ / ATT for many years now. Network coverage vs. bang for the buck.

Unless you live in a densely populated area, and even then its no guarantee, Sprint and TMob typically are bad. I have a Sprint Aircard for work, and I'm less than a mile outside of DC, and it barely works on 4G. But whatever, if it works where you need it to then no harm no foul.

VanillaCracker
Jul 18, 2013, 12:33 PM
This article only explains part of the deal. This is definitely the worst of the three (AT&T, T-Mob, Verizon) in terms of Value, for the customer. You essentially lose 50% of what you've put in every time you want to upgrade. They don't even mention what happens if you want to upgrade every 12 months, or 24 months. You have to turn in your phone after you pay the full retail price for it??? T-mobile's is the best, but honestly AT&T's sounds alright too, at least you get to keep and resell your phone. I'm not planning to upgrade my phone every year or less, but for those who do, it's turning into a leasing business :rolleyes:

T-Mac
Jul 18, 2013, 12:38 PM
Makes about as much sense as leasing a vehicle and changing autos every couple of years.

freediverdude
Jul 18, 2013, 01:02 PM
Yes, true, even if you buy the phone at full price and take it to AT&T or Verizon, you're still paying the same monthly rate for the service that has the subsidies built in. So basically these new plans from AT&T and Verizon amount to a rate increase of the amount of the phone payment. And the ETF threat/ending of the contract is now having to give the phone back instead of paying an ETF in cash/paying full price to upgrade.

They're just going to be RAKING in the money on these plans hand over fist. It's going to be very common now for people with 1 or 2 lines to have close to a $200 monthly bill. But also a lot of customers will be happy that they can always go out and get the newest phone that they see on TV for no/little down payment or upgrade hassles. So it's going to be interesting to see how well this does, and if people will tolerate their phone bill being even higher like that. This could set the stage for even higher priced phones to become more common, like $1000+ phones.

lhotka
Jul 18, 2013, 01:05 PM
So let's see.

I pay the same amount for service, pay extra to upgrade early, and don't own my device when I do.

This is a good deal how?

The most profitable customer for a carrier is someone who's run out their contract, but hasn't upgraded to a new subsidized device yet (like many who are waiting for the 5s). Notice that the monthly fee doesn't drop in that case - carriers just pocket the extra income.

This program simply advances that timetable - it's just a stealth way of increasing monthly service charges while hiding behind a fig leaf of 'early upgrades'. Folks would be much better off financially just buying a phone outright.

But of course, the carriers won't give you a discount off your service...they just pocket the extra income that they aren't using to offset the subsidy.

jdechko
Jul 18, 2013, 01:18 PM
Makes about as much sense as leasing a vehicle and changing autos every couple of years.

Compared to this, leasing seems like a bargain. At least with the lease you aren't caught paying twice: once to rent the vehicle and once to actually drive it.

In all honesty, the absolute best case is having a significant other on an opposite-year upgrade from yourself. That way you can upgrade every year with subsidized pricing. As long as your SO doesn't mind having a year-old phone, you get new tech every year.

rdlink
Jul 18, 2013, 01:25 PM
Rent-a-Center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.

I have a Share Everything plan with Verizon, and I'm thinking about leaving them with this announcement, even though it doesn't affect me. I hate the idea of supporting a company that would do something this slimy.

I wish Apple would just sell a completely unlocked phone that worked on all of the major US carriers, so that people like me could just pick and choose which carrier they want, and make them stumble over themselves trying to offer the best deal.

Mr. Dee
Jul 18, 2013, 01:39 PM
WTF, you gotta be kidding me, no way am I signing up for this, hahaha!

Millah
Jul 18, 2013, 01:43 PM
Even if you buy the phone at full retail you still are being ripped off because your bill for each month stays the same. So you buy the phone at full retail, yet are still paying for it in the bill.

Exactly, lol. But to me, this new program takes that ripoff to a whole new level.

phinsup
Jul 18, 2013, 01:44 PM
nice scam, this must have taken a significant amount of time to get the wording properly.

TonyC28
Jul 18, 2013, 01:49 PM
How can they do this without lowering the cost of service?? For years we've been told that the high cost of service is covering the subsidized price of the phone. So if the phone is separate now shouldn't the service prices go down? Just another scam by these companies.

ArchaicRevival
Jul 18, 2013, 02:21 PM
Wait, I didn't see anything about turning in your phone with the Verizon plan...

ftaok
Jul 18, 2013, 02:34 PM
We really shouldn't be surprised how the Big 2 intends to end subsidies. Did anyone really think that they'd lower the monthly rate if the buyer pays full price? Of course not.

If this is the alternative, I'll just go with the standard plan and get my subsidized phone every two years. Thank you very much.

NOTE - The current subsidy model is very good for the Carriers, the phone OEMs and the shareholders. And to a lesser extent, the user. Folks get a brand new phone every 2 years. Carriers have a customer locked in for 2 years. OEMs get to sell customers a new phone every 2 years. What's not to like?

Not sure why anyone wants to rock the boat. If subsidies were to end, people would hold onto their phones for much longer than 2 years and the carriers would be more susceptible to churn as folks would have unlocked phones and could theoretically jump from carrier to carrier (note - FCC kinda screwed the citizens on this aspect with the various digital standards).

sbailey4
Jul 18, 2013, 02:48 PM
So where exactly is anyone seeing that the rates are not changing? I, like others here, doubt they will but it has not been stated in the full details yet. They could drop the subsidized plans or offer a different, less expensive plan for this deal since there is no subsidy involved. Just no details yet so may want to not assume the worst............. (nah they will screw us) nevermind

dannyyankou
Jul 18, 2013, 03:01 PM
No thanks.

KdParker
Jul 18, 2013, 03:08 PM
Yes, true, even if you buy the phone at full price and take it to AT&T or Verizon, you're still paying the same monthly rate for the service that has the subsidies built in. So basically these new plans from AT&T and Verizon amount to a rate increase of the amount of the phone payment. And the ETF threat/ending of the contract is now having to give the phone back instead of paying an ETF in cash/paying full price to upgrade.

They're just going to be RAKING in the money on these plans hand over fist. It's going to be very common now for people with 1 or 2 lines to have close to a $200 monthly bill. But also a lot of customers will be happy that they can always go out and get the newest phone that they see on TV for no/little down payment or upgrade hassles. So it's going to be interesting to see how well this does, and if people will tolerate their phone bill being even higher like that. This could set the stage for even higher priced phones to become more common, like $1000+ phones.

I hope not. Looks like this might be time to get off the subsidize phone plans and just buy the unlocked phones and sell with it is advantagous to maximize profit and have the most of the cost for a new phone.

This will reduce the overall cost of the phone to about 400 a year..

Since they (the carriers) want to start this phone leasing program, time to shop with the total cost in mind and not just monthly payment.

Chupa Chupa
Jul 18, 2013, 03:18 PM
What am I missing? You pay the phone's price over 2 years (so let's take an iPhone worth $700), and you're paying $350/year, but in order to upgrade in 6 months time, you have to fork up the total $350 price tag AND trade in your phone...so essentially, you're renting a phone, but if you keep it for 2 years, you've paid it in full and you STILL have to trade it in?? :confused::confused::confused::confused::confused:

It not differenct than any other kind of lease. That's how they work. Take a car lease. You effectively pay it's retail value for months you use it for and at the end of the lease you return to dealer. You have zero equity in the car despite all your car payments. Most leases are for 2 or 3 and at the end of the lease term if you want to buy the car at current retail value to recapture some of your payments as equity you can. Usually it's not cost effective though.

Leasing is usually more expensive than buying but lease payments are less than loan payments. That's why most people lease. Also they like the fact they don't have to hassle with selling the car or getting a low ball trade-in.

Here you buy an iPhone for $700. Pay for use of a year. At the end of the year the wholesale value of the phone is about $350. If you keep it another year then it's not a good plan for you. That's why it's called the Frequent Device Upgrade Program.

lhotka
Jul 18, 2013, 03:30 PM
rent-a-center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.

I have a share everything plan with verizon, and i'm thinking about leaving them with this announcement, even though it doesn't affect me. I hate the idea of supporting a company that would do something this slimy.

I wish apple would just sell a completely unlocked phone that worked on all of the major us carriers, so that people like me could just pick and choose which carrier they want, and make them stumble over themselves trying to offer the best deal.

+1000

HiRez
Jul 18, 2013, 03:44 PM
This is great, now we all have a choice of different flavors of the same crap. Yay?

ghostface147
Jul 18, 2013, 03:47 PM
I just don't understand why they can't offer the same rates as T-Mobile or even cheaper. Then again, if I was a shareholder, I'd be screwing you too because I want money.

jdechko
Jul 18, 2013, 03:54 PM
Leasing is usually more expensive than buying but lease payments are less than loan payments. That's why most people lease. Also they like the fact they don't have to hassle with selling the car or getting a low ball trade-in.

Not to mention you can get a nicer car for the same amount and/or get a new car every few years.

The whole idea of leasing a phone doesn't inherently turn me off. It's the double-speak from the carriers. In the traditional model, about $20/month went to paying for the phone subsidy ($650 for a 16GB phone - $200/ 24 months = about $20/month).T-Mobile's plan reduces the monthly service by that $20 once the phone is paid for. From everything I've read, AT&T and Verizon don't, even though for years we were told that part of our monthly service fees covered the phone.

I don't have an issue with the idea of renting/ financing of a cell phone.

I don't have an issue with paying for goods & services.

I DO have an issue with paying for the same thing twice.

Technarchy
Jul 18, 2013, 05:06 PM
I'm moving my wife's line over to T-Mobile in a couple of months.

T-Mobile has better plans, the service is good in my area, and since AT&T only gives me a 30% discount on one line, adding a line to T-mobile gives me an additional 15% discount on that line.

I'll be saving quite a bit of money.

PharmDoc
Jul 18, 2013, 11:28 PM
well, so much for competition or should I say what an act of collusion.... Got to love how these carriers copy each other on almost everything.

ftaok
Jul 19, 2013, 07:37 AM
The comment comparing VZW and AT&Ts plan to a car lease got me thinking. When you trade in the phone, does it have to be in decent shape? I'm guessing that it has to be in working order, but what about dents and scratches and missing buttons (I'm looking at you Moto RIZR Z6)?

I see where TMo's plan calls for a $10/mo insurance fee, so I guess with TMo, you could beat up your iPhone and they'll still take it back.

I'm not too convinced that VZW and AT&T wouldn't refuse a slightly scratched phone when it comes time to trade it in.

mlmwalt
Jul 19, 2013, 09:30 AM
I believe it's time to start weighing the jump from VZ to TMO. 2 of my 3 lines are up for upgrade, but I'll have to dump $350 or whatever it is for an EFT for this total POS Pantech Marauder "smart phone". It's so ghetto you'd think it's for Jump or Cricket. My old BB Pearl is still a better "smart phone" and I haven't used it in 4/5 years.

MegamanX
Jul 19, 2013, 09:40 AM
so basically Verizon announced a way to double dip on customers. First we have to pay for phone subsidies threw increased contract price but to take part in Edge we would still be paying that plus a fee for edge plus the cost of the phone.

We the consumer still get screwed.

nburwell
Jul 19, 2013, 02:38 PM
Unfortunately, I see a lot of misinformed customers falling for this.

freediverdude
Jul 19, 2013, 03:01 PM
But, unfortunately, a lot of us will end up doing these plans, because we don't want to have to wait the full 24 months to get another phone (since they're more strict with the upgrade timeline now), and don't usually have $650 to just plunk down in a lump sum for a new phone (although even if you do, you're still double paying anyway).

tdar
Jul 19, 2013, 04:37 PM
I just don't understand why they can't offer the same rates as T-Mobile or even cheaper. Then again, if I was a shareholder, I'd be screwing you too because I want money.

They can't because their costs are much higher. They have the largest cell network in the US. That costs millions more every year to build and maintain. They spend millions more every year on call quality measurements and on customer service. Yes they have shareholders, who expect a return on the very large investment that they have made. Want the best service ....That's what it costs.

----------

Not to mention you can get a nicer car for the same amount and/or get a new car every few years.

The whole idea of leasing a phone doesn't inherently turn me off. It's the double-speak from the carriers. In the traditional model, about $20/month went to paying for the phone subsidy ($650 for a 16GB phone - $200/ 24 months = about $20/month).T-Mobile's plan reduces the monthly service by that $20 once the phone is paid for. From everything I've read, AT&T and Verizon don't, even though for years we were told that part of our monthly service fees covered the phone.

I don't have an issue with the idea of renting/ financing of a cell phone.

I don't have an issue with paying for goods & services.

I DO have an issue with paying for the same thing twice.

What if are we not paying for the same thing twice? What if that extra is to cover the cost that you don't have a contract and as such are not a committed source of income. Compare a apartment on a month to month agreement and a lease. The Month to month is higher because you are not a committed source of income.

senseless
Jul 19, 2013, 09:43 PM
But, unfortunately, a lot of us will end up doing these plans, because we don't want to have to wait the full 24 months to get another phone (since they're more strict with the upgrade timeline now), and don't usually have $650 to just plunk down in a lump sum for a new phone (although even if you do, you're still double paying anyway).

Really? I can think of things that are hard to wait 2 years for, but a phone is not one of them.

SpyderBite
Jul 20, 2013, 10:32 AM
Really? I can think of things that are hard to wait 2 years for, but a phone is not one of them.

+1

If you are the only person on your plan then this might be an option. But most people roll with a family plan of some sort so they can hand down devices, swap upgrades, etc.

At least that's what I do. With 4 lines on my plan with contract dates scattered I can upgrade annually if I want and just hand off my current device to my mom or my mom-in-law and they think they're getting an upgrade. :)

alent1234
Jul 20, 2013, 12:10 PM
you can go to t-mobile, pay a lot less, upgrade your phone once every 3-4 years and just buy a new ipad every year and still save money

captain kaos
Jul 22, 2013, 02:04 AM
At least in the US there is a way to upgrade before the end of the contract, Australia is still stuck in the dark ages.

AppleDude
Jul 22, 2013, 11:17 AM
What am I missing? You pay the phone's price over 2 years (so let's take an iPhone worth $700), and you're paying $350/year, but in order to upgrade in 6 months time, you have to fork up the total $350 price tag AND trade in your phone...so essentially, you're renting a phone, but if you keep it for 2 years, you've paid it in full and you STILL have to trade it in?? :confused::confused::confused::confused::confused:

You're right that this costs more than just buying the phone outright when you upgrade (based on the article description), but here's what you are missing.

Most consumers will assume it's a good deal without fully understanding the program. Others will understand the terms but are sufficiently lacking in personal finance skills that they are willing to pay a hefty premium to finance upgrades over a year rather than saving up just 75% of that amount and paying cash.

I call this a "fool's tax," even though there are times doing so can make sense (depending on how much more productive you can be with the additional features.)

jdechko
Jul 22, 2013, 12:28 PM
What if are we not paying for the same thing twice? What if that extra is to cover the cost that you don't have a contract and as such are not a committed source of income. Compare a apartment on a month to month agreement and a lease. The Month to month is higher because you are not a committed source of income.

Then the carriers have been lying to us all along.

It's really simple math. We've been sold subsidized devices while being told that part of the monthly fee is going to paying off the subsidy.

Exhibit A
If a non-contract iPhone cost $650 and you only pay $200 in the store for it, where is the extra $450 coming from?

Answer: It's pretty obvious that they're not writing it off. So it must come from your monthly fee.

Exhibit B
Early Termination Fees: If you break your contract early, you have to pay to "cancel your contract"

Answer: It costs the carriers very little to remove you from their system. But that's not the reason for the ETF. Since we already know the carrier isn't going to write off the remaining amount of the phone, the logical answer is that the ETF covers any remaining portion of the device itself. Standard ETF on a smartphone is $350 (The difference between the cost and ETF can be explained by volume discounts. A discount of $100 per phone when you are buying millions seems reasonable). Fortunately, the carriers also reduce the ETF for each month you've paid into the contract (and paid off your phone). By around the 20th month, you've completely paid off the phone and no longer have an ETF.

Exhibit C
T-Mobile: T-Mo actually separates the cost of the device from the cost of the service. The new service plans have been reduced in cost compared to the old model where the subsidy is included in the monthly fee.

Since the rates of AT&T and Verizon are the same no matter which method you choose (traditional vs outright purchase). It's logical to conclude that customers are being double charged for the pleasure. I suspect that we may see some changes to these plans in a year or so after the carriers realize that the target audience isn't fooled so easily.

With respect to your argument about apartments: I agree with you when you say that month-to-month lease is more expensive because the income isn't guaranteed. However, I think your reasoning is flawed. If I rent you an apartment, then by default, I cannot rent it to someone else. If I allow you to use my cell network, that does not preclude me from allowing someone else to use my network. I realize that my analogy breaks down somewhat when talking about the physical devices (whether cell phone or car) but it's much easier to have another phone or car delivered to the store/showroom than it is to add additional capacity to an apartment complex.

Breaking Good
Jul 22, 2013, 04:49 PM
Since the rates of AT&T and Verizon are the same no matter which method you choose (traditional vs outright purchase). It's logical to conclude that customers are being double charged for the pleasure. I suspect that we may see some changes to these plans in a year or so after the carriers realize that the target audience isn't fooled so easily.

In AT&T's defense (and I don't defend the carriers very often, if ever) they do have a prepaid plan where for $60/mo you get unlimited calls and text and 2GB of data.

I think the cheapest post-paid plan on AT&T is $65/mo for 450 minutes and 250MB of data. You may actually have to buy a separate texting plan with that.

----------

Rent-a-Center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.



Sadly, I think you've hit the nail right on the head with your statement above. I'm afraid that the carriers have realized that just about everyone who wants a smartphone, and can afford one, now has one. The only thing left to do is sign up people who want them, but can't afford them. (Ironically, this is what led to the banking crisis here in the U.S.)

I think this might have larger implications for Apple. I believe Apple makes over half their revenue from iPhone sales. It will be hard to Apple to continue to grow once that market is maxed out.

tdar
Jul 22, 2013, 05:19 PM
Then the carriers have been lying to us all along.

It's really simple math. We've been sold subsidized devices while being told that part of the monthly fee is going to paying off the subsidy.

.

Lying to us would be a Surprise? Please show me where ATT or Verizon says that part of your monthly is to repay subsidy. I don't think they have ever said that...In fact just the opposite.

It may be math but it does not have to be simple math as everyone is assuming. We really do not know how they do this. Anyone who knows is not allowed to tell and those who think they know are guessing. I'm sure of one thing- they do it in the most profitable way possible. I'd bet that there are tax incentives at play for about 36% of it. I also do not think they account for it on a account by account basis, but rather as a total cost to the company as a business development cost. But again, now I'm one of those who are guessing.

I should confess that I do not believe the proposition that I offered before to be true, just that I wanted to offer another way to see what they might do. The true fact is that we do not know how this works and that is by design. If was as simple as everyone seems to think it is, why would they not just say so? In fact they say that there is not a portion of your monthly fee that is for subsidy. So again are they lying?

jdechko
Jul 22, 2013, 05:42 PM
Lying to us would be a Surprise? Please show me where ATT or Verizon says that part of your monthly is to repay subsidy. I don't think they have ever said that...In fact just the opposite.

It may be math but it does not have to be simple math as everyone is assuming. We really do not know how they do this. Anyone who knows is not allowed to tell and those who think they know are guessing. I'm sure of one thing- they do it in the most profitable way possible. I'd bet that there are tax incentives at play for about 36% of it. I also do not think they account for it on a account by account basis, but rather as a total cost to company as a business development cost.

I should confess that I do not believe the proposition that I offered to be true, just that I wanted to offer another way to see what they might do. The true fact is that we do not know how this works and that is by design. If was as simple as everyone seems to think it is why, would they not just say so? In fact they say that there is not a portion of your monthly fee that is for subsidy. So again are they lying?


Carriers lying to us would not be a surprise. Nor would it be a surprise for them to overly-complicate things in order to confuse the customer. It's called fine print and it's been going on for quite some time. I agree that as a business, their goal is to maximize profits.

If you aren't paying for the device outright (like in the new system or on T-Mobile), the money has to come from somewhere else. Whether they tell you that it does or doesn't come from your monthly fees is immaterial.

alent1234
Jul 22, 2013, 06:48 PM
Everyone knows the impulse challenged people want it NOW and will pay for it

So you charge them as much as you can

Nothing evil



Then the carriers have been lying to us all along.

It's really simple math. We've been sold subsidized devices while being told that part of the monthly fee is going to paying off the subsidy.

Exhibit A
If a non-contract iPhone cost $650 and you only pay $200 in the store for it, where is the extra $450 coming from?

Answer: It's pretty obvious that they're not writing it off. So it must come from your monthly fee.

Exhibit B
Early Termination Fees: If you break your contract early, you have to pay to "cancel your contract"

Answer: It costs the carriers very little to remove you from their system. But that's not the reason for the ETF. Since we already know the carrier isn't going to write off the remaining amount of the phone, the logical answer is that the ETF covers any remaining portion of the device itself. Standard ETF on a smartphone is $350 (The difference between the cost and ETF can be explained by volume discounts. A discount of $100 per phone when you are buying millions seems reasonable). Fortunately, the carriers also reduce the ETF for each month you've paid into the contract (and paid off your phone). By around the 20th month, you've completely paid off the phone and no longer have an ETF.

Exhibit C
T-Mobile: T-Mo actually separates the cost of the device from the cost of the service. The new service plans have been reduced in cost compared to the old model where the subsidy is included in the monthly fee.

Since the rates of AT&T and Verizon are the same no matter which method you choose (traditional vs outright purchase). It's logical to conclude that customers are being double charged for the pleasure. I suspect that we may see some changes to these plans in a year or so after the carriers realize that the target audience isn't fooled so easily.

With respect to your argument about apartments: I agree with you when you say that month-to-month lease is more expensive because the income isn't guaranteed. However, I think your reasoning is flawed. If I rent you an apartment, then by default, I cannot rent it to someone else. If I allow you to use my cell network, that does not preclude me from allowing someone else to use my network. I realize that my analogy breaks down somewhat when talking about the physical devices (whether cell phone or car) but it's much easier to have another phone or car delivered to the store/showroom than it is to add additional capacity to an apartment complex.

beaniemyman
Jul 22, 2013, 07:18 PM
nah, t-mobile is the way to go, those guys have the best offers.

tdar
Jul 23, 2013, 02:51 PM
nah, t-mobile is the way to go, those guys have the best offers.

Maybe where you live but not where I do. A phone that does not work is not worth any amount of savings.

Mac1dime
Sep 16, 2013, 04:44 PM
Rent-a-Center comes to the phone business. Pay waaaay too much for something just because you want it now. Slime buckets.

I have a Share Everything plan with Verizon, and I'm thinking about leaving them with this announcement, even though it doesn't affect me. I hate the idea of supporting a company that would do something this slimy.

I wish Apple would just sell a completely unlocked phone that worked on all of the major US carriers, so that people like me could just pick and choose which carrier they want, and make them stumble over themselves trying to offer the best deal.

The new iPhones will support more bands, like the iphone 5, but depending on what model you purchase may be locked to a carrier. My Verizon subsidized iphone 5 was unlocked and worked with AT&T sim so I'm hoping the Verizon model will come unlocked to jump ship but may require contract which is the catch.