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The Phone You're Paying For But Not Getting

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People also forget that the carriers get screwed by fraud/non-bill pays

WhySoBluePandaBear

Mar 21, 2013, 6:52 AM
They subsidize these phones (iPhones at $450 per shot) and have TONS of issues with people taking the phones and running.

People using stolen information/fraud in general is a major problem for the US carriers. Some people literally don't pay their bills and then just sell the phones when they've been disconnected - and end up actually making a profit.


So while they charge you more monthly due to the subsidizing factor, they also lose a ton from people taking advantage of the system.
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Slammer

Mar 21, 2013, 7:58 AM
You're defending a circumstance that doesn't need to be defended. Companies already factor everything of running a business including lawyers and court costs to recover losses under the issues you mention. This "Should" be all factored in with a running contractual service. Then when someone purchases a phone at reduced cost, an added cost should be added to offset the price. Once the phone is paid for, the cost should drop back down to normal operating service costs if willing to continue service.

I'm really having a hard time understanding why people are willing to pay extra for something that is PAID OFF. When was the last time you had to continue paying the loan for your car once it was paid off?

John B.
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Joshiwa

Mar 21, 2013, 10:28 AM
Most companies need 3 years of continued service to begin making a profit off a customer.
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ecmark00

Mar 21, 2013, 12:01 PM
If a company needs 3 years of continued service to make a profit, they have a failing business model (aka sprint).

Considering a customer can get a new subsidized phone at 20 months, it wouldn't make sense to start pulling a profit a year later in the middle of that second subsidy.
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Santapleaseme

Mar 21, 2013, 12:22 PM
As someone who works in the wireless industry we dont get paid according to the price plan or how much you spend on a phone. 9 times out of 10 when someone purchases a lesser priced to mid ranged device we get more compensation for it then the high end devices, but how we really get paid is off of the contract. So that person who is purchasing phones at 2 year agreement prices and cancelling service actually causes us to lose massive amounts of money not just from the company side, but the person who sold it to thems pockets. I agree with the fact that you are paying more if you wait to upgrade and everything about the article, but the reason why most companies dont actually turn profit untill 3 years off of a customer is because of all of ...
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Zpike

Mar 21, 2013, 9:09 PM
I ran a cellphone store myself for a few years, and you're confusing one big point. Third party dealers who resell Sprint, Verizon, ATT, etc. services have a hard time making a profit because, as you mentioned, the carriers don't pay them unless the customer keeps the contract. And they don't make squat off the phones themselves. Heck, there were times that I gave away high end phones at a 10 or 20 dollar loss just to get the commission from the contract, only to have the carrier charge me back on the commission a few months later when the customer canceled the plan.

It was also common for carriers to use me to solicit business without paying me my rightful commission. A customer would come in and I would do all the work of explaining th...
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WhySoBluePandaBear

Mar 21, 2013, 2:08 PM
I know you don't literally mean that.


Look-up the term "Investment". There is NO SUCH THING as quick and sustainable money in corporate America. If you're going to make money and survive long term, you have to have solid investments. In this case, they're investing in a consumer base that *hopefully* pays their bills and don't decide to go all fraud-central on them.


The US has the most profitable companies in the world, so don't act like we need some advice from other countries on how to run things - what we need is a less corrupt, war mongering, paid off government - not fiscal suggestions.
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Globhead

Mar 21, 2013, 11:38 AM
They wouldn't have to worry about people getting "free" phones and ditching the service if THEY DIDN'T INSIST ON SUBSIDIZING PHONES.

And that means those losses come out of OUR BILLS.

Thanks for providing yet another reason to end phone subsidies.
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Simply_Eric

Mar 21, 2013, 1:13 PM
They don't insist on subsidizing. You can walk in and pay full price for a phone and not have the contract extended (though it doens't typically work for brand new customers) But how many choose to go that route? I'm guessing less than 1% of 1%.
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Globhead

Mar 21, 2013, 8:33 PM
Simply_Eric said:
They don't insist on subsidizing. You can walk in and pay full price for a phone and not have the contract extended (though it doens't typically work for brand new customers) But how many choose to go that route? I'm guessing less than 1% of 1%.


Yes, you could do that, but YOU WOULD STILL BE PAYING FOR IT. How do people keep losing that thought?

When I say they insist on subsidizing phones, clearly I mean that they insist on that being their pricing structure. To try to deny that by noting that a person could pay for it and not actually take the phone is just ridiculous.
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usconcepts

Mar 21, 2013, 11:06 PM
Well, you actually don't have to pay the subsidy. You can pay full price and then activate on the pre-pay plan. For myself, that wouldn't work as I travel heavy internationally, and the domestic footprint is a bit smaller, but for 90% of Americans, they can pay full price, then get the prepay plan on the same network and voila, they are not paying subsidies, but are on the same network.
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DarkStar

Mar 27, 2013, 1:28 PM
if only that worked. Have you looked at Verizon and AT&T's prepay plans? And Verizon only lets some of the phones be prepaid. You don't get 4G internet and you don't get all the roaming agreements that you get with Post-paid. So you don't get the same coverage.
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Zpike

Mar 21, 2013, 9:15 PM
I guess you're in favor of giving more free bailout money to banks too, right? Because as we all know, many more people walk off on credit card debt, mortgages, and car loans than those who walk away from a $600 phone debt. So, we should all be sympathetic to the poor hurting banks and give them more free money too, right?
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