Yep, I asked AT&T why my monthly payment didn't go down when my iPhone 4 was paid off and they wouldn't give me an answer.
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T-Mobile USA to Cease Offering Subsidized Device Pricing Options in 2013
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As someone who owns a contract-fulfilled unlock-eligible AT&T iPhone4 with an monthly service plan that's overpriced to (in effect) include 1/24 of the cost of the phone every month, I find this very interesting.
Because with VZ and ATT, you're signing the contract on the plan, not the phone. You can sell the phone right now if you wanted - you're just going to have to keep paying the rate you signed up to plan. Even if the phone is paid off, you're contracted to the plan.
Thus, you have to keep paying the same price.
this is actually what I plan on doing anyway 
forget about subsidized phones with high monthly rates.
purchase the phone outright and save cash by having a lower plan.
glad t-mobile isn't jumping the bandwagon AT&T and Verizon have set.
forget about subsidized phones with high monthly rates.
purchase the phone outright and save cash by having a lower plan.
glad t-mobile isn't jumping the bandwagon AT&T and Verizon have set.
I'm all for pricing transparency - even in this thread it's clear some people don't understand how much they're overpaying for their subsidized phones.
Still, the example given in the article ($99 + $20 x 20 months) will at best get you an iPhone 4 (not 4S) at current prices.
Still, the example given in the article ($99 + $20 x 20 months) will at best get you an iPhone 4 (not 4S) at current prices.
Bandwidth isn't unlimited, so why would you expect unlimited data? Why don't you expect unlimited voice as well? Wouldn't the logic be the same?
They tried. The first iPhone was supposed to be (I think) $699 and not offered on a contract with subsidies. But people weren't ready for that yet, and the double whammy of no subsidies and a more expensive phone than your typical "dumb phone" had a predictable reaction. Remember how your typical phones were "free" or maybe $49 on contracts back then?
Some of us don't talk on the phone as much as we need to. Texts sometimes get the job done unless something's urgent.
To each his own.
I agree. The iPhone didn't really take off until AT&T started offering subsidies. The value of iPhone and like devices is more apparent now so things might be a little different, but I have a hard time seeing people flocking to $700 phones to save$20-$30 per month.
My understanding is this is the came concern China's largest cell provider has.
Sprint (and the other large US carriers) have to front the money to Apple and collect the monthly charges to offset it. This has credit risk and capitalization costs whether it is by equity or debt.
In China those capital and credit costs are higher since they have a GDP growth rate of 7% or so and thus a cost of debt of almost 12%. Although I presume China Mobile could issue commercial paper in any national jurisdiction with low rates due to their size and credit rating. 4%.
If you had to pay $849 for an iPhone (adjusted for currency and tax tricks), would you do that for a monthly cost of $40 rather than $100?
The answer is some folks simply do not have the front money or think it out, so the 24 month commitment is a big profit center for the carrier IF they can afford to capitalize it.
By opting to go retail only on hardware this gives T-Mobile a huge capital availability for network build out. Important with the delays to market they had with legacy networks, delayed frequency compatibility by Apple, and of course the aborted AT&T takeover.
Rocketman
Sprint (and the other large US carriers) have to front the money to Apple and collect the monthly charges to offset it. This has credit risk and capitalization costs whether it is by equity or debt.
In China those capital and credit costs are higher since they have a GDP growth rate of 7% or so and thus a cost of debt of almost 12%. Although I presume China Mobile could issue commercial paper in any national jurisdiction with low rates due to their size and credit rating. 4%.
If you had to pay $849 for an iPhone (adjusted for currency and tax tricks), would you do that for a monthly cost of $40 rather than $100?
The answer is some folks simply do not have the front money or think it out, so the 24 month commitment is a big profit center for the carrier IF they can afford to capitalize it.
By opting to go retail only on hardware this gives T-Mobile a huge capital availability for network build out. Important with the delays to market they had with legacy networks, delayed frequency compatibility by Apple, and of course the aborted AT&T takeover.
Rocketman
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Yes it could. Cell carriers have for a while had screwed pricing with non subsidized phones being charged the same as those with et.
In my country all the data plans are (essentially) unlimited, but the pricing differs only by the bandwidth/speed. Makes sense to me.
No subsidy you save $20, presumably once it is paid off you also save that amount.
Instead of paying $900 for off contract phone and the same $50 as the guy with a subsided phone
Yes, and it's a great plan. I've been on it for a week now (not an iPhone but one would work). If I'm calling a lot I just use my Google Voice number and GrooveIP over WiFi or the HSPA+ network (5 GB at full speed and then throttled after that).
I'm on this plan already with T-mobile. None of the big 3 offer anything like it, which is how I ended up there, without subsidizing a phone their plans are dirt cheap. The cheapest plans that include a phone subsidy would run about double, and all that cost added up would be way more than it costs for even a really expensive phone.
We just bought two phones outright, were able to shop around and find a good deal and get exactly what we wanted.
It will be tricky with the Apple stuff since the unsubsidized ones are so expensive (I get the impression they intentionally overprice them because they can get away with it since the US carriers all have plans with subsidy built in anyway).
We just bought two phones outright, were able to shop around and find a good deal and get exactly what we wanted.
It will be tricky with the Apple stuff since the unsubsidized ones are so expensive (I get the impression they intentionally overprice them because they can get away with it since the US carriers all have plans with subsidy built in anyway).
The math is not that hard. A $200 phone with a 2 year contract of $30 a month is quite a bit more expensive than a $700 phone and no contract.
I guess the reason they use the contract model in US is just this, most people don't seem to calculate how much it actually ends up costing.
I have an unlocked iPhone 4S on T-Mobile, which cost me $300 on Craigslist. If I were on a single line plan with unlimited everything, I'd pay about $60 I believe.
T-Mobile: $60X24= 1,440 + 300 (cost of iPhone)= 1740
AT&T: $90 (and this is for 450min + 3GB web + unlimited text) X24= 2,160 + 100 (cost of iPhone 4S)= 2260
A T-Mobile plan comparable to the AT&T one with 500 min cost $50 a month.
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This could be great, or could be very disappointing. Right now Tmobile offers plans with subsidized devices, but they also offer BYOD plans with slightly lower monthly rates BUT you still have to sign a contract. If Tmobile thinks people will sign a contract with no device subsidy they are crazy!
A major carrier in spain tried a no-subsidy plan recently, and it backfired big time.
Maybe this t-mobile variety is genius, but bad news for apple because it encourages people not to upgrade after two years.
Option 1:
$650 iphone 5
+ $70 unlimited voice/data
= $70/month
Option 2:
$99 iphone 5
+ $70 unlimited voice/data
+ $20 device financing for 28 months
=$90/month
How does t-mobile benefit?
1. They avoid a huge contract with apple? (not sure how)
2: Because they believe that the lower monthly rate will attract value minded customers who are ONLY comparing rate plans between other carriers.
Maybe this t-mobile variety is genius, but bad news for apple because it encourages people not to upgrade after two years.
Option 1:
$650 iphone 5
+ $70 unlimited voice/data
= $70/month
Option 2:
$99 iphone 5
+ $70 unlimited voice/data
+ $20 device financing for 28 months
=$90/month
How does t-mobile benefit?
1. They avoid a huge contract with apple? (not sure how)
2: Because they believe that the lower monthly rate will attract value minded customers who are ONLY comparing rate plans between other carriers.
The $500 up front savings for the subsidized model spread out over 2 years comes to $21/month. Therefore, I'm not sure it's that big a deal money-wise one way or the other unless you plan on keeping the phone for quite a bit more than 2 years (which most don't do, I'm told).
As far as I know, but you dont get a discounted monthly plan. So lets look at two people who decide to keep their phone for 3 years.
AT&T $80 x 36 = $2,880
TMobile ($60 x 36) + ($20 x 24) = $2,640
In that third year on AT&T you would be paying a subsidized monthly plan without taking advantage of the subsidy.
Yea, After I got my phone unlocked / 2 years w/ AT&T, I asked them about this before telling them I was switching to straight talk. The person on the phone admitted it didn't make sense.