No More Contracts What Will You Do

[rui no onna]

Except you don't get to actually sell the phone and get that money from the sale (unless you actually paid off the whole price of the phone). That's the whole catch behind it all.

Sure you can. You just use the proceeds of the sale to pay off the device. I believe payoff at the 12 month mark for any capacity iPhone 5s on Jump is $324 ($27.50x12). As long as you make more than that from the sale, you're ahead.

 

[Max(IT)]

I've always paid full price for every iPhone I owned (and I owned all of them), so nothing new for me.

Subsidized phones are less popular here in Italy ....

 

[rui no onna]

I've always paid full price for every iPhone I owned (and I owned all of them), so nothing new for me.

Subsidized phones are less popular here in Italy ....

Before moving to the US, I always paid full price my cellphones, too. However, the previous plan pricing model on major US carriers means you pay double for your phone if you don't subsidize so it just didn't make much sense to pay in full if you plan on keeping the service for the duration of the contract.

 

[C DM]

Sure you can. You just use the proceeds of the sale to pay off the device. I believe payoff at the 12 month mark for any capacity iPhone 5s on Jump is $324 ($27.50x12). As long as you make more than that from the sale, you're ahead.

Right, you have to pay it off somehow, which wasn't something that was mentioned in the post they I originally replied to with that.

----------

Before moving to the US, I always paid full price my cellphones, too. However, the previous plan pricing model on major US carriers means you pay double for your phone if you don't subsidize so it just didn't make much sense to pay in full if you plan on keeping the service for the duration of the contract.

Yup, that's basically it for most of US carriers, or at least was like that until not too long ago.

 

[GigabitEthernet]

American phone contracts are such a rip-off!

I can pay £15 a month on a 1 month contract for truly unlimited everything, that's completely seperate from my phone. Add to it a £500-£600 phone, over 24 months it's damn cheap.

Whereas, you get this so-called 'no contract' T-Mobile thing, where you pay $70 a month .

 

[zorinlynx]

I went mobile share. My monthly bill is going to remain about the same but I can add my iPad to the plan and get 10GB instead of 4GB.

I'll be paying more in the long run as I have to buy my phone outright, but right now I can afford it so why not. If finances get tight I'll probably scale back to the 2GB single line plan on AT&T and drop the iPad from the plan until things get better.

I'm not even sure I'm going to upgrade to the iPhone 6 right away. Not being on a plan + subsidized means I don't feel like I'm getting ripped off if I don't upgrade my phone when I become eligible. I suspect a lot more people will keep their phones longer now because of this. My iPhone 5 still feels like it has SO MUCH life left in it.

 

[C DM]

American phone contracts are such a rip-off!

I can pay £15 a month on a 1 month contract for truly unlimited everything, that's completely seperate from my phone. Add to it a £500-£600 phone, over 24 months it's damn cheap.

Whereas, you get this so-called 'no contract' T-Mobile thing, where you pay $70 a month .

There are really quite a few more different options than one particular T-Mobile one. That plus price comparisons aren't always the same, look at the price of gas (petrol).

 

[zorinlynx]

American phone contracts are such a rip-off!

I can pay £15 a month on a 1 month contract for truly unlimited everything, that's completely seperate from my phone. Add to it a £500-£600 phone, over 24 months it's damn cheap.

Whereas, you get this so-called 'no contract' T-Mobile thing, where you pay $70 a month .

I wonder if it has to do with population density?

Many other countries have a much higher density than the US, so a smaller infrastructure can cover more people. This would lead to lower prices, theoretically.

 

[bobright]

I prefer lower monthly and keep phone a little longer, however if you can afford to buy full retail every 2 years or every year I think this is ok.

Those Next and Every Two plans seem to be a rip off because the trade in prices stink. I would rather buy a phone and sell it on eBay, however eBay prices may get lower on the iPhones in the future, I do not see the market maintaining such a high resale value.

I do not plan on getting anything but an iPhone but we will see what the future brings, to me Windows and BB phones are not even a consideration, Android and iOS are the only options for me.

You don't have to trade in your phone with Next you can still sell it on eBay if you'd like

 

[aneftp]

You don't have to trade in your phone with Next you can still sell it on eBay if you'd like

Sure you can always sell your phone with ATT next (tmobile jump) whatever the carrier calls it these days.

Unless you paid off the phone or made the equivalent of 20 months (which covers the entire purchase) and you cannot rebuy another phone on the next installment program at the zero percent interest rate.

The common person won't do this.

$650-750/850 upfront doesn't bother me. But we need to think of the common customer. Americans don't want to pay full $650-750 all at once. It's just the way of America.

Everything is financed.

How many European car loans span 4-5 years with no down payment or close to zero?

How many Europeans mortgages on homes are financed with less than 5% down? Very little.

 

[bobright]

Sure you can always sell your phone with ATT next (tmobile jump) whatever the carrier calls it these days.

Unless you paid off the phone or made the equivalent of 20 months (which covers the entire purchase) and you cannot rebuy another phone on the next installment program at the zero percent interest rate.

The common person won't do this.

$650-750/850 upfront doesn't bother me. But we need to think of the common customer. Americans don't want to pay full $650-750 all at once. It's just the way of America.

Everything is financed.

How many European car loans span 4-5 years with no down payment or close to zero?

How many Europeans mortgages on homes are financed with less than 5% down? Very little.

Yes you can

 

[aneftp]

Yes you can

You cannot get Next on the same line in month 12 without turning in the phone on the same line.

People say sell off the phone to eBay. That's fine. Than what phone are you going to use?

You are going to 1. Pay for another phone (craiglist eBay or full retail price)
2. Pay off the next phone (since you don't have the phone to trade in)

 

[spaceballl]

Buy the new one, sell the old one. Repeat.

 

[deeddawg]

Mostly because the subsidy used to be built into the plan cost regardless of whether you upgrade or not. [...] I've always felt compelled to upgrade to the next version because paying the device subsidy while not getting a new device feels like a ripoff.

Still a matter of cost / payment. While you certainly didn't have to upgrade, you'd effectively be handing free money to the carrier by not doing so. With the new plans it's is nice to be free from that.

People say sell off the phone to eBay. That's fine. Than what phone are you going to use?
You are going to [...] 2. Pay off the next phone (since you don't have the phone to trade in)

Yep. Pay off the phone early, get the new phone, sell the old. Simply requires a little bit of forethought and a modicum of available cash to float the payoff amount for short time. Easy peasy.

 

[Wicked1]

I switched from AT&T to Tmobile. I went from 160 to 90 a month. Ended up buying a iPhone 5c for 300 bucks on craiglist and tmobile gave me a free month.

kind of freaked me out that they asked me where I live and go to see my coverage. If it ends up sucking I can always go back to AT&T. So far so good tho. Noticed no changes so far. Had it for for 2 weeks.

Hey just curious what zone or area of the US are you in and how are the T-Mobile LTE and 4G speeds as I was thinking of doing the same thing, even though I just jumped on the new AT&T 10GB plan with $15 per phone per month plan. I am in NJ in the North East but moving to Florida in the next year

 

[rui no onna]

While you certainly didn't have to upgrade, you'd effectively be handing free money to the carrier by not doing so. With the new plans it's is nice to be free from that.

Exactly. It really should have been this way from the start.

Yep. Pay off the phone early, get the new phone, sell the old. Simply requires a little bit of forethought and a modicum of available cash to float the payoff amount for short time. Easy peasy.

In some cases, it might even be worth it to do the trade-in via the carrier's program.

Effective trade-in values:

AT&T
iPhone 5s 16GB: $260
iPhone 5s 32GB: $300
iPhone 5s 64GB: $340

T-Mobile
iPhone 5s 16GB: $325
iPhone 5s 32GB: $325
iPhone 5s 64GB: $325

Verizon
iPhone 5s 16GB: $325
iPhone 5s 32GB: $375
iPhone 5s 64GB: $425

Definitely worth considering the trade-in for the Verizon 64GB iPhone particularly when you take into account that there are no seller or PayPal fees. AT&T & T-Mobile are kinda bleh but worth considering if you're just trading in to Gazelle, etc.

 

[crzdcolombian]

Hey just curious what zone or area of the US are you in and how are the T-Mobile LTE and 4G speeds as I was thinking of doing the same thing, even though I just jumped on the new AT&T 10GB plan with $15 per phone per month plan. I am in NJ in the North East but moving to Florida in the next year

I am in brookline, MA. Its a couple minutes from Boston. Near BU/BC. It works fine. Haven't really noticed that big of a difference other than it doesn't work while underground on the subway like AT&T did (only the 1st 2 stops tho). Not enough for me to justify paying 60 bucks more a month for. I also don't need 10 GBs of data. I switched more because AT&T pissed me off by telling me I could upgrade and get the 15 buck plan. Told me to wait a couple weeks then like nope that deal expired 2 weeks ago. Sucks to be you.

Regardless you need to own your own smart phones. I had a iPhone 5s and bought a 5c for 300 on craigslist. The 3rd phone I got a 50 buck Nokia windows phone at the windows store. Not the best but my mom doesn't do anything but make calls. My parents live in Avon, CT which is a a suburb of Hartford, CT. Its spotty at time but so was AT&T. So far haven't noticed any difference at all.

They did freak me out when asking me where exactly do I go because it might not work there. If I notice big differences I'll just switch back to AT&T. My job gives me 25% off on my phone so I am waiting for my 1st bill to see if I get all 3 for 70 bucks

 

[Deguello]

Sure you can always sell your phone with ATT next (tmobile jump) whatever the carrier calls it these days.

Unless you paid off the phone or made the equivalent of 20 months (which covers the entire purchase) and you cannot rebuy another phone on the next installment program at the zero percent interest rate.

The common person won't do this.

$650-750/850 upfront doesn't bother me. But we need to think of the common customer. Americans don't want to pay full $650-750 all at once. It's just the way of America.

Everything is financed.

How many European car loans span 4-5 years with no down payment or close to zero?

How many Europeans mortgages on homes are financed with less than 5% down? Very little.

If the common person chooses to "lease" the phone for 12 payments instead of buying it for 20, that's the common person's choice, isn't it? This gives them a way to get a new phone every year, if that's what they want. It gives them a chance to keep a phone past two years without continuing to pay for a subsidy, if that's what they want. At least they have the choice now. Before, you paid the subsidized service price no matter what.

 

[aneftp]

If the common person chooses to "lease" the phone for 12 payments instead of buying it for 20, that's the common person's choice, isn't it? This gives them a way to get a new phone every year, if that's what they want. It gives them a chance to keep a phone past two years without continuing to pay for a subsidy, if that's what they want. At least they have the choice now. Before, you paid the subsidized service price no matter what.

With any "lease" you analyze residual value. And the carriers clearly have made the initial "lease" of the cell phones weighed heavily in their favor.

Also these NEXT/EDGE/ whatever we want to call them.

The fact remains, the carriers have found a way to trick the public into accepting what amounts to stealth price increases.

Consider as little as a year ago, one could "upgrade" every 20 months on ATT at the full subsidy price. Considering the "subsidy" was around $450. That amounted to about a $22.50 subsidy for the consumer. $450 subsidy/20 months before next upgrade.

Now the carriers are saying we are going to give you a good deal and let you save $15/month per line. So instead of the $22.50 subsidy built in, consumers are thinking a $15/month savings is a good deal. That's a $7.50 price increase per line and the majority of consumers don't even realize it.

The carriers just raised your cost of ownership/usage with cell phones by $7.

 

[rui no onna]

Consider as little as a year ago, one could "upgrade" every 20 months on ATT at the full subsidy price. Considering the "subsidy" was around $450. That amounted to about a $22.50 subsidy for the consumer. $450 subsidy/20 months before next upgrade.

Now the carriers are saying we are going to give you a good deal and let you save $15/month per line. So instead of the $22.50 subsidy built in, consumers are thinking a $15/month savings is a good deal. That's a $7.50 price increase per line and the majority of consumers don't even realize it.

The carriers just raised your cost of ownership/usage with cell phones by $7.

On the 10+GB plans, the savings is actually $25 per line. Also, you need to tack on the $36 upgrade fee to the subsidized plans. Subsidy is effectively just $20.70/mo.

 

[deeddawg]

Consider as little as a year ago, one could "upgrade" every 20 months on ATT at the full subsidy price.

There was a time when AT&T Premier customers could "upgrade" every month. Not comparable though since it ceased to be available several years ago. (it was pretty cool while it lasted... ) Same for the 20 month upgrade cycle; gone. It's 24 month now, so the monthly subsidy is effectively $18.75 not $22.50 for the old plans.

Now the carriers are saying we are going to give you a good deal and let you save $15/month per line. So instead of the $22.50 subsidy built in, consumers are thinking a $15/month savings is a good deal. That's a $7.50 price increase per line and the majority of consumers don't even realize it.

I see where you're going, but you're comparing one aspect of a larger picture and ignoring the other factors. You're not looking at overall monthly costs of old vs. new plans, nor are are factoring in the up-front cost of a subsidized phone spread over the contract time frame. (Plus you need to use the current $18.75 subsidy figure not the deprecated $22.50)

Someone comparing old plans vs new needs to consider current monthly cost (plus phone cost and upgrade fee every upgrade cycle) against new plan monthly costs in three scenarios: (a) no upgrade, (b) Next type upgrade, (c) subsidy upgrade.

My bill dropped $70 a month by switching over. Yes, I might have been better off to stay put if my tendancy were to upgrade every line at the first opportunity. But since we we don't, the numbers work to my advantage.

 

[aneftp]

On the 10+GB plans, the savings is actually $25 per line. Also, you need to tack on the $36 upgrade fee to the subsidized plans. Subsidy is effectively just $20.70/mo.

Again. It's smoke and mirrors. Cause the mobile data plans weren't competitive before.

It's like Me telling you one day a plan costs $50. Than raising the prices to $70 the next week.

Than I tell you I will cut you a great deal and sell you the same plan for only $60.

What has happened is ATT has increased the prices compared to pre mobile share plans data and now just adjusting it. But it's still higher than 2 years ago.

 

[Deguello]

Again. It's smoke and mirrors. Cause the mobile data plans weren't competitive before.

It's like Me telling you one day a plan costs $50. Than raising the prices to $70 the next week.

Than I tell you I will cut you a great deal and sell you the same plan for only $60.

What has happened is ATT has increased the prices compared to pre mobile share plans data and now just adjusting it. But it's still higher than 2 years ago.

My bill is $100 and change lower than it was two months ago. I could use more smoke and mirrors like that.

The subsidy was $450 / 24 = $18.75 per month, per phone. My bill has been cut $25 per month per phone. That's a savings of $6.25 per month for those 24 months and a savings of $25 per month for every month I would have been paying the subsidized service price while off contract.

Edit: Even if you use your 20 month period -- which doesn't apply all that well to iPhone purchases -- the $22.50 is still less than the $25 cut in service price for Next and out-of-contract phones.

 

[Deguello]

American phone contracts are such a rip-off!

I can pay £15 a month on a 1 month contract for truly unlimited everything, that's completely seperate from my phone. Add to it a £500-£600 phone, over 24 months it's damn cheap.

Whereas, you get this so-called 'no contract' T-Mobile thing, where you pay $70 a month .

On the other hand, England is about the size of Louisiana and the whole of Great Britain is about the size of Michigan.

Much lower population density and much more area to cover means the infrastructure costs might not even be apple to oranges. That doesn't account for all of the difference, but it probably does for some.

How much do you pay for a TV license?

 

[aneftp]

My bill is $100 and change lower than it was two months ago. I could use more smoke and mirrors like that.

The subsidy was $450 / 24 = $18.75 per month, per phone. My bill has been cut $25 per month per phone. That's a savings of $6.25 per month for those 24 months and a savings of $25 per month for every month I would have been paying the subsidized service price while off contract.

Edit: Even if you use your 20 month period -- which doesn't apply all that well to iPhone purchases -- the $22.50 is still less than the $25 cut in service price for Next and out-of-contract phones.

It's because you were using the mobile sharing plans. They were not a good deal from day one.

ATT has finally wised up and made it more affordable.

But we've compared the numbers before with other previous plans. The old mobile shares were not competitive