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The Phone You're Paying For But Not Getting

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A Disgusting Oversimplification. ..


Mar 20, 2013, 2:00 PM
Highly disappointed in you Rich for this "editorial" piece that patronizes to the lowest common denominator.

What bothers me is people will read this and actually feel "informed".

Its easy to bash the top 4 carriers as they assume most of the risk and trailblaze into the future with cutting edge innovation that can only come with the resources of deep pockets. Cellular service is not a charity, networks don't build and and maintain themselves. (Unless you're an MVNO)

You said yourself, without a subsidy this would deter many people from getting newer technology and stiffen innovation.

If the purpose of this editorial was to get carriers to offer a no contract or bring your own phone differetial in pricing, that's a whole lot...
Rich Brome

Mar 20, 2013, 2:08 PM
Did you read the whole article?

I have no problem with the cost of service. Nor do I have a problem with T-Mobile's Equipment Installment Plan, which is very much like a subsidy, but fair.

I only have a problem with the very specific situation where your phone is paid off and your carrier keeps charging you a subsidy anyway. How can you defend that?

Mar 20, 2013, 2:10 PM
I feel ripped off every month paying $150 for 1 Iphone and 1 flip phone with 700 minutes! That is insane!

I can go prepaid and pay half of that and still get service in my area. But of course when you are stuck to a contract and the etf is 2 car payments it's not that easy to get out.

Mar 21, 2013, 1:39 PM
Its an interesting argument....and i'm not saying who is right and who is wrong, but i will make an attempt at explaining this...

The carriers are saying that customers never ever pay back the subsidy. That's right. Never.

The phones are subsidized by the carriers to push sales. The 24 month commitments are there because the carriers don't earn a profit until the 20th month or so of a customer's life cycle. What they are stating is that they don't get into the black from that subsidy until month #20 out of a 24 month contract. Is this true? IDK? Who really knows?

So in the end, the carriers are saying that it cost XX to pay for the service and you always pay XX. You are not paying off a subsidy. Tmobile's model is the fi...

Mar 20, 2013, 4:27 PM

Carriers should be figuring in all the service costs for research, developement, building new technology and maintaining staff, leasing etc. That part of service billing is understandable. Subsidizing phones is a separate entity. It is included in the bill but should never surpass a paid down product.

You and I often agree on many things but, you being a phone geek amoungst other phone geeks here, I'm disappointed that you feel it is ok to keep paying for something that is yours free and clear. How would you feel if Sears kept charging your credit card for a dishwasher that was paid down months ago? Rich speaks the unbearable truth. This is why subsidizing is such a huge deal for carriers like Verizon(as an example). Main...

Mar 20, 2013, 7:52 PM
If you're out of contact, then it's an at will condition of service.

At that point youre a willing buyer paying a willing seller's pricefor goods and services.

Your argument assumes as well, that your quality of service with Cricket, Metro and TMo is the same as Sprint, ATT & VZW when un reality it is not.

I still like yoy Rich been reading you for years I even respect you opinion. I just feel this artical was a bit patronizing and beneath you.

Rob P.

Mar 21, 2013, 1:39 AM
explain further please.

Mar 21, 2013, 1:40 AM
how could you be? i dont understand your reasoning. it doesnt make sense. Rich analyzed it very well and mentioned all possibilities. we all know subsidies kill wireless carriers. they lose money on two things: 1. Cost per gross acquisition, and 2. subsidies. they make these up in (depending on 1 and 2) 6-8 months. They also put an ETF on there to protect them some more.

Mar 21, 2013, 3:19 PM
"If the purpose of this editorial was to get carriers to offer a no contract or bring your own phone differetial in pricing, that's a whole lot of not going to happen."

T-Mobile is already doing it. Pretty sure this is how Europe's wireless markets work, too.

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