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Old Dec 6, 2012, 04:42 PM   #26
bdkennedy1
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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.

Quote:
Originally Posted by MJedi View Post
Depending on how much the monthly plans are, this might a good way to attract customers. Your monthly plans SHOULD be lower if you use an unsubsidized phone. Isn't the point of a contract is that you pay for the phone over the 2-year contract? And when the phone is paid off, your monthly should go down.

Not at AT&T or Verizon.
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Old Dec 6, 2012, 04:49 PM   #27
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Hope this works out...the more the merrier when talking about carriers.
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Old Dec 6, 2012, 04:50 PM   #28
JAQ
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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.
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Old Dec 6, 2012, 04:52 PM   #29
Allenbf
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Quote:
Originally Posted by bdkennedy1 View Post
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.
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.
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Old Dec 6, 2012, 04:56 PM   #30
Gemütlichkeit
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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.
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Old Dec 6, 2012, 04:57 PM   #31
JamesInLA
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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.
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Old Dec 6, 2012, 04:58 PM   #32
hayesk
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Quote:
Originally Posted by Redbeard25 View Post
Give me a pay-per-voice-minute, unlimited text and unlimited data plan, and I'm there.
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?
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Old Dec 6, 2012, 05:00 PM   #33
notjustjay
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Location: Canada, eh?
Quote:
Originally Posted by CrAkD View Post
Wow. Color me impressed. When apple released the first iPhone I always thought they would be the ones that turned the cell phone industry in the US upside down getting rid of the contracts.
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?
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Old Dec 6, 2012, 05:01 PM   #34
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They should give customers options.

Subsidized phones, but pay higher monthly rates.

Unsubsidized phones, and pay lower monthly rates.
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Old Dec 6, 2012, 05:02 PM   #35
chuckd83
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Chinese carriers do this.
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Old Dec 6, 2012, 05:02 PM   #36
Hakone
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Quote:
Originally Posted by hayesk View Post
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?
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.
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Old Dec 6, 2012, 05:02 PM   #37
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If it takes hold. Even the Galaxy S3 has a hefty $350 subsidy. It will take more than $15-20/month less on a 2-year contract to make it worthwhile. T-Mobile tried a version of this a few years ago (their "Even More+" plans, which were non-contract), but when given the choice most customers stuck with the subsidized plans. Their "Value" plans still require a 2 year contact.
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.
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Old Dec 6, 2012, 05:04 PM   #38
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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.

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Old Dec 6, 2012, 05:05 PM   #39
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Quote:
Originally Posted by ixodes View Post
This ought to prove interesting.
Yes it could. Cell carriers have for a while had screwed pricing with non subsidized phones being charged the same as those with et.
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Old Dec 6, 2012, 05:06 PM   #40
mrelwood
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Quote:
Originally Posted by hayesk View Post
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?
In my country all the data plans are (essentially) unlimited, but the pricing differs only by the bandwidth/speed. Makes sense to me.
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Old Dec 6, 2012, 05:07 PM   #41
charlituna
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Originally Posted by chiefsilverback View Post
I'm not really sure how this changes anything, instead of paying $80/month you pay $60/month for your service + $20/month for the device!?!?!

.
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
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Old Dec 6, 2012, 05:08 PM   #42
neuropsychguy
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Quote:
Originally Posted by Westside guy View Post
This is a great thing for US consumers... but I'm not sure they're going to recognize that fact.

----------



Their $30/month, 100-minute voice plan (only available on the web) is essentially this. I believe if you go over 100 minutes in a month the cost is 10 cents/per minute.
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).
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Old Dec 6, 2012, 05:08 PM   #43
milo
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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).
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Old Dec 6, 2012, 05:09 PM   #44
mrelwood
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Quote:
Originally Posted by Karma*Police View Post
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.
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.
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Old Dec 6, 2012, 05:09 PM   #45
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Originally Posted by chiefsilverback View Post
But am I not right in thinking that after 2 years you can ask Verizon or ATT to unlock your device and you're then free to go wherever you like?
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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Old Dec 6, 2012, 05:13 PM   #46
tasset
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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!
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Old Dec 6, 2012, 05:16 PM   #47
osaga
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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.
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Old Dec 6, 2012, 05:21 PM   #48
hudson1
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Originally Posted by mrelwood View Post
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.
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).
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Old Dec 6, 2012, 05:21 PM   #49
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But am I not right in thinking that after 2 years you can ask Verizon or ATT to unlock your device and you're then free to go wherever you like?
As far as I know, but you don’t get a discounted monthly plan. So let’s 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.
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Old Dec 6, 2012, 05:22 PM   #50
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Originally Posted by bdkennedy1 View Post
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.
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.
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