The Phone You're Paying For But Not Getting
Top message: A Disgusting Oversimplification. .. by MadFatMan
Replying to: How? by Rich Brome
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 first one to ever get a repayment from a customer. You also get the flexibility of being free to cancel or chase the next big deal in the cell phone world when your contract is over.
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