Home  ›  News  ›

FCC Wants A Better Explanation from Verizon On ETFs

Article Comments  

all discussions

show all 34 replies

Hmm, just talked to my sprint, att and tmo reps

Desolationblade

Jan 9, 2010, 3:11 AM
I had a very interesting conversation with my reps today. I am a radio shack store manager BTW. We sold verizon not too long ago and i still remember quite a bit.

Sprint's term fees start at 200, after the 4th month it declines 10, thens tops at 50, at month 20 and levels out.

ATT starts at 175, declines 5 a month, so it ends at 60.

Tmo stays at 200 i think she told me.

On a 69.99 data plan for sprint, adding in taxes and fee's it comes to about 79, sprint makes their money back on smart phones in 5 months.

on an 89.99 data text talk plan with att, with the exception of the Iphone, they remake their money back in 4 months.

Tmo depends on their plans, but a talk/txt/data takes about 5 months i believe.

Verizon, being th...
(continues)
...
Menno

Jan 9, 2010, 3:30 AM
You're assuming that every penny goes towards paying for the phone, and that talking/data cost the company nothing.
...
Desolationblade

Jan 9, 2010, 4:00 AM
No, the reason behind it is going to be proven with this.

When I bought my palm pre, It was 299.99 with a 100 mail in rebate. On the employee plan i gotta go to the sprint store. My rep was kind enough to look into something very interesting. the 2009 year, only 43% of people that bought phones actually filled out correctly, and sent in for the rebate. So 57& of them either did not send it in, lost it, or filled it out incorrectly.

So, the actual retail price of the palm pre is 356.88 is what sprint pays for it. So if a customer buys the pre for roughly 300 dollars and the phone costs sprint 360 dollars, theres a 60 dollar difference. Now sprints actual cost for the 69.99 data plan which they keep about 74 of it is.... about 32 d...
(continues)
...
Menno

Jan 9, 2010, 4:16 AM
Verizon phones are typically cheaper for the end user, and an increasing number of people are buying online or at places that don't offer MiR. Also, models launched on sprint first tend to then launch on Verizon with more features (such as wifi on the Pixi/Ozone, or significantly cheaper price on phones like the Hero/Eris)

I can also tell you that when I worked for a verizon retailer, I helped every customer fill out their rebate and told them to come back if they never received their cards after a month. In almost 2 years, I had 4 people come back to me with issues. Granted, this is just one store, but I know a lot of other reps who are the same way.

The Droid (last I checked) was around 480 Store cost (retail 540) it sells for 299...
(continues)
...
arich97

Jan 9, 2010, 11:34 AM
Can you even have a discussion without exploding with VZW mojo? I read threads on here and you do nothing but pump your chest for VZW. Give it a rest, please. Let a man state what he heard from the other 3 companies reps without rushing to VZW's defense. The company already has 80 million customers, soobviously they are doing ok. I just hope you are on the VZW payroll, because if you aren't, you should be.
...
bp3dots1

Jan 9, 2010, 12:23 PM
In his defense (as much as I dislike VZW) Reps can be notoriously bad info sources. Extreme bias creeps into everything they say.

Try getting one to admit another company's obvious advantage over theirs flat out. (Ex. Sprint $99.99 everything vs Att's similar featured offering at $149.97) An ATT rep will only try to point out how even though they cost 150% more, they are a better value.
...
immortalkist

Jan 9, 2010, 2:35 PM
i work for at&t there prices are AMAZING!! i have sprint(love them) i pay about 100 bucks amonth for my phone i have the the data plan cust i use the web alot for my phone, but like i said i work for at&t's warrenty dept for buisness accts i get people telling me everyday that they are gonna cancel and go to VZW, well honestly i cud care less it doesnt effect my paycheck but when i look at the prices IRU accts pay for like one line that has data/txt/and like 1500 mins a month its amazing i get 1500 mins plus unli txt and web use, i get custs on the phone that spend 600 bucks a month for 2 lines and they do all the things i do, working for at&t has opened my eyes and i know where to go for prices that arent to outrageous!
...
Menno

Jan 9, 2010, 3:44 PM
I can have quite a few discussions.

But it's kinda pointless to have a discussion about something when you're discussing things on two completely different levels, no? He wanted to post numbers, so I responded with numbers.
...
waldorfsalad

Jan 10, 2010, 7:23 PM
arich97 said:
Can you even have a discussion without exploding with VZW mojo? I read threads on here and you do nothing but pump your chest for VZW. Give it a rest, please. Let a man state what he heard from the other 3 companies reps without rushing to VZW's defense. The company already has 80 million customers, soobviously they are doing ok. I just hope you are on the VZW payroll, because if you aren't, you should be.


So if Verizon's got lots of customers, and is doing "okay", no other points of view should be expressed. Ok. Got it. And I didn't even pump my chest once. 🙂
...
Overmann

Jan 9, 2010, 1:07 PM
I wish I could get the Droid for that much... I have to pay $537 for one, not including shipping.
...
Menno

Jan 9, 2010, 3:45 PM
so the cost is basically the same then. They typically add around 60 to cost to make the retail pricing.

Have you checked ebay?
...
Overmann

Jan 11, 2010, 10:43 AM
My wholesale cost is $537
...
rob_vzw

Jan 10, 2010, 2:05 AM
Dude, you can put out all the numbers you want but the truth is VZW does break even around 6 months. If you work for VZW, you should take their Financial Acumen training--they'll flat out teach you that's when they break even. Unless of course they've updated their curriculum to match their FCC responses lol
...
Mossberg

Jan 10, 2010, 11:51 AM
Menno, are you still working in the industry?
...
Menno

Jan 10, 2010, 3:33 PM
No
...
Mossberg

Jan 10, 2010, 3:40 PM
That is too bad for VZW.

I like reading your posts. I hope your employment you have now is fulfilling.
...
Menno

Jan 10, 2010, 3:50 PM
Still looking for employment actually. It seems that we're in a recession? But I have a couple leads I'm tracking down.

At the moment I'm working independently with a couple phone retailers about data positioning, qualifying, and how to track their numbers. Doesn't pay that much, but it's something.


Glad you like my posts 🙂
...
Slammer

Jan 10, 2010, 12:53 PM
Please Menno, Don't forget that those gains in new VZW subscribers are also offset by almost 1.7 million that left for the iphone. Proponents tend to leave out negative info.

I am not a numbers man, but flamboyancy with figures from carriers, is enough for me to red flag any excuses of what carriers are really suffering. If a company such as my carrier of choice is consistently suffing, why are they still able to make a profit and feel comfortable with current ETFs and bogo offers? I know that if a carrier is doing poorly and taking a hit on people cancelling contracts to flip devices, then maybe offering bogo offers shouldn't be in their best interest.
...
Menno

Jan 10, 2010, 3:47 PM
Sprint is also selling off a lot of assets every year, and cutting back employees.

And of those 1.7 million who left for the iphone, how many paid the ETF? I'm willing to bet most of them did not. In fact, even with Sprint, a good chunk of people leaving the carrier did so after they were out of contract, or they got out of contract. That's what a lot of people don't see.

Bogo offers arn't in their best interest, but sadly a pretty big chunk of the consumer base will hold off on getting a new phone "until it is on sale" a huge part of this is the carriers fault, yes, but another part is that's the way the typical consumer is anyway. They've been trained by Walmart, NewEgg, Kohl's, etc. that if you wait long enough, everything will...
(continues)
...
Azeron

Jan 10, 2010, 4:21 PM
They should take the full retail price and subtract the subsidized cost of the phone and make that the ETF. Then reduce the ETF by 1/24th per month. This way the "free" phone will have a higher ETF.
...
Menno

Jan 10, 2010, 4:26 PM
I like this idea.. but could you imagine trying to explain this to customers... yes, it is christmas! so your ETF went up by $100!
...
Azeron

Jan 10, 2010, 4:43 PM
I guess you're right.

"Mr. Customer the Storm2 full retail is $549.99. You are getting a $400 discount on the first one and a $549.99 discount on the second. This discount is given with the understanding that you will keep service on both lines for twenty-four months. Your early termination fee on the first device is $400 and is reduced by $16.67 for each 30 days you fulfill of your contract. Your early termination fee for your "free" Storm2 is $549.99 and will be reduced by $22.92 for each 30 days you fulfill of your contract."

Way too logical. I guess the $350 ETF will have to suffice.
...
Menno

Jan 10, 2010, 5:55 PM
Logic is bad for consumers! It makes them think! 🤣
...
you.CAN.hear.me.now

Jan 11, 2010, 10:43 AM
I like the way you quote Sprint phones, break down how much money they're making, etc. then assume Verizon's are 100 bucks more.

You're flat wrong.

Verizon has had free Blackberry Storms, Blackberry BOGO offers, free Droid Eris offers, the Droid for 199 after rebate (it's cost is 538 btw, so that's 338 dollars they're eating that has to be made up - that takes a little while). The EnV Touch is another great example - 403 dollar phone that sold for 99 after rebate. That phone did not even require a data package for the first 6 months it was out. Samsung Omnia - 524 - selling currently for 9.99. Blackberry Curve is about the only phone that doesn't cost an arm and a leg to Verizon. Touch Pro2? 598. Five hundred and ninety eight dollars, ...
(continues)
...
JeffdaBeat

Jan 9, 2010, 8:20 AM
Exactly, companies don't just lose money on discounting the handset. They lose money on advertisement, network upgrades, network maintenance, purchasing phone numbers for customers without them. All these things require cash that Verizon gets from your service.
...
dshearn

Jan 9, 2010, 10:22 AM
There is alot more in play then that.


The "service" that is provided all over the nation.....has a price to maintain.


There is more then just the money lost at purchase.

the company I work for takes 11 months to break even on a r300.

Something like a blackberry , were they would have to pay Fees every single month back to blackberry could take even longer.
...
rob_vzw

Jan 10, 2010, 2:02 AM
Sounds about right. When I worked there, VZW would teach employees that the average break even point was around 6 months (funny how their answer is so different when the FCC asks).

Honestly it is somewhat amusing to hear so many people try to come up with explanations about how VZW has all of these other expenses that aren't included and that's how it takes longer for them to break even. How could VZW possibly be the industry leader it is when it comes to financials by using such a pathetic business model that would call for it to not become profitable until the 23rd or 24th month of a contract? The bottom line is they should have known better than to try and pull that one past the FCC and know they simply need to own up to it and drop t...
(continues)
...
Azeron

Jan 10, 2010, 2:07 AM
I agree. They should not be trying to make any excuses. Just tell those *bleeps* "This is how it is." No backbone.
...
Desolationblade

Jan 10, 2010, 3:27 AM
Ya, verizon is a very profitable company, and for how many advanced devices its customers are using in family plans and such, i highly and i mean highly doubt it takes more then 6 months to regain the money back.
...
Menno

Jan 10, 2010, 4:23 PM
Because whenever you purchase something, you amortize it over it's expected life. You don't pay if off right away because it messes with your quarterly earnings (all companies do this, not just cellphone companies)

I don't doubt that on the typical contract plan they become profitable much shorter than the 23months (even though finance wise it takes 23), but I HIGHLY doubt this number is as small as six months for Smartphones, especially Bogo deals.

Something like a 5500 is only discounted 60-80 (before rebate) so you should make that up pretty quickly. Even a phone like an EnV3 isn't discounted that much (besides at holidays) compared to the discount on these "advanced devices"

I think the ETF model needs a serious overhaul, peri...
(continues)
...
Azeron

Jan 10, 2010, 4:29 PM
Carriers should stop selling phones. Allow the manufacturers to sell directly to consumers and simply activate approved handsets with no contracts.
...
Menno

Jan 10, 2010, 5:22 PM
oh.. there still will be contracts.. but I see it as something like

% off your monthly rate, or at least locked in pricing (I dont think prices will stay the same like they are now without contracts)

-access to warranty exchange (offer instant replacements instead of going without a phone for weeks while you wait to hear back from Motorola/LG). This might be available for a monthly fee as well?

-Financing on devices (you only have to pay so much per month instead of all at once.. like what Tmobile does now)
...
Versed

Jan 10, 2010, 5:27 PM
Azeron said:
Carriers should stop selling phones. Allow the manufacturers to sell directly to consumers and simply activate approved handsets with no contracts.


On that I totally agree, because if and when that happens, phones would be sold like mp3 players, cameras, tv's and computers with big discounts and rebates. You would never see a $550 Droid, or even a $600 iphone. It would be significantly less. And all of these phones, should be unlocked ie. cdma ones should be used on any carrier. similar to gsm phones.

The carriers would hate this, but it would be in the long run would be far better. I would see many of the pro-carrier people here crying how it would be bad, because it wouldn't allow...
(continues)
...
Azeron

Jan 10, 2010, 6:28 PM
No question the carriers would hate it. They like things just the way they are with the possible exception of T-Mobile.
...
Versed

Jan 10, 2010, 6:55 PM
T-Mobile is no different. They just a nice smiley face on it. And I'm cool with that.
...

This forum is closed.

Please log in to report a message to the moderator.

This forum is closed.


all discussions

Subscribe to Phone Scoop News with RSS Follow @phonescoop on Threads Follow @phonescoop on Mastodon Phone Scoop on Facebook Follow on Instagram

 

Playwire

All content Copyright 2001-2024 Phone Factor, LLC. All Rights Reserved.
Content on this site may not be copied or republished without formal permission.