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T-Mobile Phasing Out Phone Subsidies

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Traditional plans are like leasing cars

by Rusty Shackleford    Dec 7, 2012, 2:54 PM

The traditional upgrade, contract, repeat process has always bugged me because it's basically the equivalent of leasing a car: people can't afford it up front so they need to pay for it in monthly installments and then act indignant at the early termination fee the carrier expects if they terminate early. The other thing that has bugged me is that the service costs are inflated to compensate for this, yet after the device is out of contract (i.e. paid off) the service costs remain high because you are expected to upgrade. After all, everyone upgrades within 2 years anyway because they would just DIE if they were seen with last year's iPhone model or an Android that can't handle the OS with the latest goofy name. (Seriously people, it's just a phone.)

The odd thing is that carriers like MetroPCS where you buy your phone up-front and have minimal embedded service subsidization costs are sneered upon as ghetto carriers for poor people while carriers where people literally cannot afford their phones up front and need the cost masked as embedded service costs are seen as responsible plans for everyone else.

I like how T-Mobile is making this process more open and sensible, but there's always been an alternative. It's called a credit card. People can buy their phones with a credit card and then pay it off over a span of months or decades if they wish, of course that will greatly inflate the cost of the phone over time but people who pay for things in such a way typically don't care about the long term financial consequences anyway. All that matters is that they, like, got a cheap phone TODAY and don't have to, like, suffer with last year's trendy phone color, like, anymore! Like, OMG!

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