Why would the carriers drop their monthly fee when the phone is paid off? It just gives them more profit to keep the fee at the same level - this hides the price of the phone from the user and if you keep the phone more than 2 years then their profits go up.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
AT&T and Verizon to follow T-Mobile and drop phone subsidy
- Thread starter EbookReader
- Start date
- Sort by reaction score
Why would the carriers drop their monthly fee when the phone is paid off? It just gives them more profit to keep the fee at the same level - this hides the price of the phone from the user and if you keep the phone more than 2 years then their profits go up.
You do realize that the subsidy would end for the Android phones too right? It's not like the iPhone will suddenly become $650 while every other phone stays the same price that they currently charge. Those $100-$200 Android phones would no longer be $100-$200.
As for the rest of it, I will be thrilled to see the end of the days where you get locked into a contract, EVEN IF you bring an unlocked phone when you start service. That's the game AT&T is playing right now, and it's total BS.
More to the point, it prods the customer into starting a fresh 2 year contract (i.e., another 2 years locked to AT&T): They may as well get a new 'phone, since they're paying for it monthly anyway.
Customer friendly? Customer hostile more like. Total BS.
Last edited:
While it is certainly possible I missed something in reading the links...since Verizon hasn't announced the details of the plan, can you tell me how you know that under the new plan the monthly rate won't drop after the phone is paid off.
Source, please.
For me it's not about subsidy buy the monthly cost. What tmobile did is nothing new as they have been offering cheaper monthly plans if you bring your own phone for years. All att needs to do is lower their monthly plans. Phone subsidy is good for the customers who dont mind paying more over time.
While it is certainly possible I missed something in reading the links...since Verizon hasn't announced the details of the plan, can you tell me how you know that under the new plan the monthly rate won't drop after the phone is paid off.
Source, please.
My source is every subsidized iPhone until now.
No one has ever had their rates dropped once the contract is over and if you buy an unlocked iPhone at full price, you do not pay less for your phone plan.
Now while its possible things will change, historically here is no reason to think things will change.
----------
That was my point; it's why I don't think this will be good for the average user who doesn't value being off contract.
Last edited:
There are folks who prefer to be stuck in a 2-year contract?
Not doubting you. Just wondering what sort of demographic they're in?
That is unless market forces intervene; e.g. TMO starts peeling enough customers off of AT&T and Verizon due to their new plan/phone structure.
Most folks here are going to be enthusiasts, so the concept of keeping a phone more than two years is foreign.
There is no upside to no contract for me.
I can't use my AT&T iPhone 5 on Verizon and I can't get LTE from T-Mobile with it. I don't get lower rates with a non-subsidized phone, so currently the contract doesn't impact me negatively.
----------
That is unless market forces intervene; e.g. TMO starts peeling enough customers off of AT&T and Verizon due to their new plan/phone structure.
Most folks here are going to be enthusiasts, so the concept of keeping a phone more than two years is foreign.
Sure, and maybe I'll get a pony. I deal with what the benefits are now, not what they in a hypothetical situation.
Currently there is no benefit to me with an unsubsidized phone.
Buying an unlocked iPhone 5 and using gophone (AT&T 's prepaid $60 unl talk/ text 2gb LTE + $10 per gb plan) beats out on contract AT&T. Stores do not market the plan at all. You can also add money to your account by buying cards under face value on eBay.
You know that T-Mobile offers trade-ins on old models, right? You can get about $200 for a 4S in good condition and put it toward the purchase of a new phone.
Unless you're in an area that's been refarmed with 1700 MHz spectrum on T-Mobile, those 4Ses will not get the full service that the coverage maps advertise.
----------
Personally I would be totally ok with Verizon following T-Mobile's lead. Then I might be able to afford a plan on my own instead of being on my dad's.
For those customers who always have to have the latest and greatest, it will make no difference except for transparency. They'll still be paying for a phone every month, but now it will be clear to them how much of their bill is actually paying for their phone.
The people who will really win are those who are willing to continue to use their phone for more than two years. Personally I have no qualms about using my current iPhone 4S after my contract expires in October -- it still does absolutely everything I want it to. Under a no-subsidy plan, I'd be able to keep using my phone and pay $20 less per month on my phone bill as long as I was willing to do so. As it is now, I have no incentive to do so...in fact, I would be smarter to upgrade as soon as I become eligible and sell whichever phone I don't want to use.
The people who will really win are those who are willing to continue to use their phone for more than two years. Personally I have no qualms about using my current iPhone 4S after my contract expires in October -- it still does absolutely everything I want it to. Under a no-subsidy plan, I'd be able to keep using my phone and pay $20 less per month on my phone bill as long as I was willing to do so. As it is now, I have no incentive to do so...in fact, I would be smarter to upgrade as soon as I become eligible and sell whichever phone I don't want to use.
Keep in mind that AT&T, Verizon, and T-mobile have very different businesses. AT&T and Verizon invest far more heavily in their networks, which results in better infrastructure and service, albeit at significantly higher cost.
Many in Europe would find the amount USA customers pay for mobile phone service (up to $150/mo for one line) absolutely insane. In much of Europe, you can get a phone service and a data plan for $20/mo. In some cases, this may even include a smaller phone subsidy. The capital expenditures of these European mobile carriers are very different from the capital expenditures of AT&T and Verizon, which have invested billions and billions to provide 40-60Mbps LTE in almost every market. Europeans will get these services too, and at much lower cost, it will just take more time.
That is unless market forces intervene; e.g. TMO starts peeling enough customers off of AT&T and Verizon due to their new plan/phone structure.
Most folks here are going to be enthusiasts, so the concept of keeping a phone more than two years is foreign.
Sprint is also the wild card.
Softbank is saying they will invest 15 billions into Sprint in the next 2 years.
In Japan, when Softbank first became a wireless carrier, they discounted heavily to pick up customers. They might use T-Mobile strategy to get there "faster" if it is proved popular with T-Mobile customers. Sprint has done it for years with prepaid (Boost and Virgin Mobile) so they are no stranger to splitting phone and service into 2 bills.
There is no reason for VZW and AT&T to follow TMo's flawed model. They are putting billions of dollars into their LTE deployments, unlike TMo and Sprint.
TMobile needs to spent less time coming up with gimmicks like Uncarrier and Jump, and spend that time and money on improving their network. Having no contracts won't get them tons of long term customers. Having a reliable, fast network does. TMo is concentrating their efforts on BS marketing, while leaving their network to rot on EDGE.
People aren't leaving Tmobile because of the contracts. They're leaving because of their mediocre service. Jump and Uncarrier don't solve any of these issues. They're just making noise for no reason at all.
If contracts were truly a killer, there would be a mass exodus of VZW and AT&T users. Clearly we're not seeing that. People actually value reliable service and expansive coverage.
TMobile needs to spent less time coming up with gimmicks like Uncarrier and Jump, and spend that time and money on improving their network. Having no contracts won't get them tons of long term customers. Having a reliable, fast network does. TMo is concentrating their efforts on BS marketing, while leaving their network to rot on EDGE.
People aren't leaving Tmobile because of the contracts. They're leaving because of their mediocre service. Jump and Uncarrier don't solve any of these issues. They're just making noise for no reason at all.
If contracts were truly a killer, there would be a mass exodus of VZW and AT&T users. Clearly we're not seeing that. People actually value reliable service and expansive coverage.
Speak for yourself on what you don't see, as I know multiple people that are actively considering/researching a switch to TMO or who have already done so.
The key trigger for most has been the disconnect of the service plan from the phone payment plan; that is a paradigm shift thats proved successful in the prepaid segment and may change the postpaid segment.
Your hyperbole gets in the way of the excluded middle: it may be successful enough to generate a change. Or it may not. Well have to wait and see.
Just curious, you exhibit a strong dislike for tmobile yet seem to jump into any thread related to them. Why is that?
We have learned to ignore this guy. He just trolls on T-Mobile threads.
But back on the subject, I'm seeing more and more people curious about switching to T-Mobile.
Likewise. They're not the best choice for everyone of course due to data coverage outside metro areas. Still, a lot of people don't give a hoot about a couple times a year trip vs. significant monthly savings the rest of the time. If you were a traveling salesman driving all over, then of course you'd stick with AT&T or VZW.
Contract or no contract, the prices stay roughly the same. The only thing that changes when carriers do this, is how much you pay WHEN you pay it. It's clever deception. You can say you have a 2 year contract to get a subsidized price, and pay an ETF if you want to get out of the contract... or you can say you have NO contract but have to pay off the price of the retail value of the phone if you cancel service before a set period of time. Even with NO contract, if a company sells you a $650 iPhone, and you cancel after two months, you bet your bippy you'll be paying a fee to help recoup most of that retail cost....
Not true for people who keep a phone past the two year mark, use a hand-me-down phone from a family member, or perhaps buy a phone used from somewhere else. These people are could see a $20/mo per line savings if the phone payment and service plan were decoupled.
Yeah, Apple knows that if it becomes normal in the US for folks to buy unsubsidized phones, then Apple will want compelling products at multiple price points.
I'd love for them to maintain the 4/4S form factor with upgraded internals as that is the most attractive looking phone they've ever made. I guess we still have another year with the 4S, so maybe there is a chance that Apple won't completely abandon the 3.5 inch form factor.
I wonder when Sprint will drop subsidy like T-Mobile and go with phone financing (for those that want to pay in installment instead of all upfront).
If the carriers would follow T-Mobile's model it would I hope be good. They would be willing to loan you the money for a phone but afterwards you get a lower plan rate. Right now as soon as I can upgrade I tend to do it for no other reason that I refuse to pay the carriers free money.
Hell I would even gladly sign a contract if it would lock me in at a lower rate.
As for Apple I could see it really hurting them as Apple's phones retail price is generally higher than others and really over priced 3-6 months after the phone has been released.