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Subsidizing logic

dukebound85

dukebound85

macrumors Core
Original poster
Jul 17, 2005
19,218
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How is it that the iphone is supposabley subsidized through the plan yet if you are past the 2 year mark and are month to month, no longer on a contract, you still pay the subsidized phone price rates?

shouldnt the service become cheaper as you are no longer paying part of the phone cost back to att?
 
another thing....

say you give your iphone to a family member and the phone is no longer in contract. why does att FORCE them to sign a 2 year contract? the phone has already been paid off....
 
Interesting question...

I think the difference is, carriers offer you a phone at a subsidized price knowing they have your commitment over the next 2 years and will eventually make that money back.

I don't think its like, "okay, we're going to add $30 to your monthly bill for the next 2 years, until the phone is paid off".

See what I'm saying?
 
You sign a contract for how long you pay, NOT for how much. They make a certain amount of profit from each phone bill from every customer, they have to pay expenses and such, and have to give a certain amount to apple to pay for the phone. They keep you in a contract long enough so you pay enough money to make the cost of them subsidizing the price worth it to the company. After that point you can continue to use service if you wish, or disconnect, either way AT&T has made enough money to make the subsidizing worth it to them.

dukebound85 said:
another thing....

say you give your iphone to a family member and the phone is no longer in contract. why does att FORCE them to sign a 2 year contract? the phone has already been paid off....
Click to expand...

Get your facts straight. They don't require any contract if they start using a new phone. A contract is only required if you get a phone at a subsidized price (upgrade). If you have customer provided equipment, you can sign on service with any company with no contract.
 
dukebound85 said:
another thing....

say you give your iphone to a family member and the phone is no longer in contract. why does att FORCE them to sign a 2 year contract? the phone has already been paid off....
Click to expand...

Like I said, that's just the way it is. If enough people were leaving them for doing this, then they'd change the way they do things. But that's not happening, so they'll continue to get what they can get. The law of supply and demand, I guess. We want it and they can charge what they can until we don't want it.

edit to jmann: yes, they can do as you say, but if they want to stick with AT&T they have to do the plan. Otherwise they have to JB, and I guess go T-mobile, for what that's worth.
 
jmann said:
Get your facts straight. They don't require any contract if they start using a new phone. A contract is only required if you get a phone at a subsidized price (upgrade). If you have customer provided equipment, you can sign on service with any company with no contract.
Click to expand...

One of my friends told me att wouldnt let him do that and that his brother had to start a new contract. maybe the agent was incompetent?
 
dukebound85 said:
One of my friends told me att wouldnt let him do that and that his brother had to start a new contract. maybe the agent was incompetent?
Click to expand...

Very imcompetent. I work for Verizon, and all cellular companies work the same. They would not force a contract for no reason unless they were lying cause they are paid commission. I witnesses this earlier today with a Verizon account. :rolleyes:
 
jmann said:
Very imcompetent. I work for Verizon, and all cellular companies work the same. They would not force a contract for no reason unless they were lying cause they are paid commission. I witnesses this earlier today with a Verizon account. :rolleyes:
Click to expand...

Not to be a smartass, but you work for V, so how can you be sure what AT&T is doing? There's been loads of people talking about having to pay the data plan for iPhones already paid for on here. So, IDK, if what you say is true. However, it's all hearsay from MR.
 
iphone.aggie said:
Not to be a smartass, but you work for V, so how can you be sure what AT&T is doing? There's been loads of people talking about having to pay the data plan for iPhones already paid for on here. So, IDK, if what you say is true. However, it's all hearsay from MR.
Click to expand...

I've checked prices and have learned things about the "competition" so-to-speak. Most all companies run things in a similar fashion, because it works.

Look for example. The left is AT&T the right is Verizon.
 

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iphone.aggie said:
^^^^^^^^^^
Am I missing something? What does that have to do with the data plan or being required to pay for it?

Those are the calling plans.
Click to expand...

I know they are. I'm just showing that to reinforce the similarity between the companies. You just questioned my statement about the mythical "required contract". If some talked to a customer care rep at AT&T and asked about a contract extension for simple phone switch I guarantee that they will prove me right.
 
jmann said:
I know they are. I'm just showing that to reinforce the similarity between the companies. You just questioned my statement about the mythical "required contract". If some talked to a customer care rep at AT&T and asked about a contract extension for simple phone switch I guarantee that they will prove me right.
Click to expand...

All I know is what I've read from some people here. Like I said, it's hearsay.
 
dukebound85 said:
How is it that the iphone is supposabley subsidized through the plan yet if you are past the 2 year mark and are month to month, no longer on a contract, you still pay the subsidized phone price rates?

shouldnt the service become cheaper as you are no longer paying part of the phone cost back to att?
Click to expand...

it's kinda tricky, but the fact is, if you bought an iphone with no contract ($600 - x$) and decided that you're gonna purchase a plan from AT&T, they're not gonna give you a discount on your monthly fee because you paid more..

the subsidizing is just the bait, and the contract is the hook...
 
sammich said:
So if you're off the contract, don't you technically have an unlocked phone? Or does that not work that way in the US?
Click to expand...

No, not in the US. The only company that is cool about unlocking their own phones is T-Mobile, they will provide unlock codes for phones after you have them 90 days.

aprofetto said:
I think he's showing how carriers can by very similar in what they offer.
Click to expand...

Exactly, thanks for understanding my point. :)

iphone.aggie said:
Just wait he's replying to me now.

BTW jmann, since we have you here. What do you think about the possibility of iPhone going to V. Also, would V handicap the iPhone?
Click to expand...

There have been rumors going around at work about that. I honestly think that no one has a clue what will happen, and everyone should just let Apple do it's thing. ;)
 
Yes, that part doesnt make any sense and I think its the only phone that does that. Since other cellphones you dont have to plug them into Itunes in order to activate them. You just stick someone elses SIM in there and you're good.



dukebound85 said:
another thing....

say you give your iphone to a family member and the phone is no longer in contract. why does att FORCE them to sign a 2 year contract? the phone has already been paid off....
Click to expand...
 
dukebound85 said:
One of my friends told me att wouldnt let him do that and that his brother had to start a new contract. maybe the agent was incompetent?
Click to expand...
Actually it depends on the rate plan. Some like the FamilyTalk plans require a contract on all lines that are part of the shared plan.

This means that you are both correct.

Dave
 
dave006 said:
Actually it depends on the rate plan. Some like the FamilyTalk plans require a contract on all lines that are part of the shared plan.

This means that you are both correct.

Dave
Click to expand...

That's not true. I'm in a family plan and I added a used iPhone to it without signing a two year contract.

The only thing that required a two year contract was the original iPhone, which wasn't even subsidized. All the new iPhones (3G and 3GS) can be bought w/o subsidary and used without contract.
 
megamanbnmaster said:
That's not true. I'm in a family plan and I added a used iPhone to it without signing a two year contract.

The only thing that required a two year contract was the original iPhone, which wasn't even subsidized. All the new iPhones (3G and 3GS) can be bought w/o subsidary and used without contract.
Click to expand...
Sorry but you got lucky and the rep let the requirement slide but the official AT&T policy as stated in MyCSP and in the TOS state:

FamilyTalk: FamilyTalk may require up to a two-year service agreement for each line. FamilyTalk plans include only package minutes included with the primary number, and minutes are shared by the additional lines.

Dave
 
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