The Phone You're Paying For But Not Getting

People actually think that $200+ phones are routinely given away, and that somehow doesn't come out of the monthly payment.

T-mobile
5 Galaxy s3= $ 2750.00
1 hot spot = $70.00
5 lines with 8gb= $280.00
1 2gb hotspot = $30.00
Total $310.00 month
2 year = $10,270.00

Verizon
5 galaxy s3= $999.95
1 hot spot = $0.
5 lines with 1 hot spot with 10 gb $320.00 a month
2 year= $8679.95

Now who is cheaper and getting ripped off. Do your math before you start call all carriers a scam.

Americans won't pay what a device is worth unless the cost is hidden.

Dan Hesse once stated the "sweet spot" for high end phone pricing is $199 and he Iis right on the money with that figure.

Yes, we all know you are financing a phone we as Americans just dont want to talk about it.

I guess Rich intended the article to be a thought provoking call to action of sorts. Correct me if I am wrong but he wants carriers to offer a no contract bring your own phone rate plan theatsubscribers who have completed their commitment could tak3 advantage of the savings as well or have a financed portion of the bill that would itemize phone payments from service payments.

I dont see ither happening. But wow this editorial got alot of traction ...
(continues)

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.

T-mobile USA officially launches the Blackberry Z10 for customers. Unique price point. You have two options: 1. pay in full or 2. pay $ 99.99 now and then $18 per month for 24 months (you can pay more if you want) Total price $531.99.

You also save money on the monthly plan. After the $18 per month is up, you also save on top of that. You can also pay that as quick as you want with no finance charges. Should be an interesting idea for T-mobile. Watch other companies to follow suit.

so this is what you're talking about??

https://www.phonescoop.com/articles/article.php?a=12126 »

It's a little complicated to figure out exactly what we are paying for our phones (good enough reason to change the system right there).

Your first subsidy with a new carrier can be as high as $400 for some of the very popular high-end phones. That works out to about $20/month.

But your "upgrade" discount is usually only about $200-250, which is about $10/month.

So T-Mobile's option only relieves us of the subsidy scam if we are planning on staying with the same carrier (for whatever reason) by switching to the non-subsidized plan for a renewal, AND if we took advantage of the $400 discount for the first phone.

If you truly want to not waste money, you have to switch carriers every 2 years to get $400 back from the $20/month you...
(continues)

I bought a Samsung Galaxy S3 from T-mobile full price. (Just don't trust Craigslist) But take that phone to Straight talk. In the store Straight talk sells flip phones that run on Verizon and Android phones that run on Sprint. (At least in my area, Indiana.) But if you get on Straight talk's site you can pay $15 for a T-mobile SIM card that supports their 4g, you now have a 4g t-mobile phone running with a 4g t-mobile sim running on T-mobile's network. (Since it is a T-mo phone running on a T-mo network, there is no reason to unlock it either.)

Now I pay $45 a month for unlimited Talk and text and data (The data is limited to 2gb, which most places are now but the T-mo prepaid plan that limits you to 2gb is $60 a month.) You would think ...
(continues)

There is a tricky way that works if you are switching to T-Mobile or qualify for a maximum upgrade online to get a really cheap price on a phone. If you are planning on going on their Monthly 4G plan, there is a better way to do it than they will tell you in the store or on the phone. Don't try and explain this to them as they are not bright enough to figure this out.

Lets give you the example of today, March 22nd. You want to go on Monthly 4G and buy a Samsung Galaxy Note 2. So you walk into T-Mobile (make sure its a company owned store or company website), get their Monthly 4G plan for $60 bucks, pay $699 for the Galaxy Note 2, and walk out the door. Done. That's the way T-Mobile wants you to do it. That's the way you are supposed to...
(continues)

Sure, let's shift over to the global model and make you pay full price for your phone.


Let's see - 5 family members x 5 iPhone 5's at $649+tax. Looks like we're skipping Christmas every two years. lol.

Service plan costs are what they are...the prices cover only the cost of providing the service plus a mark up to ensure profit, there is absolutely no part of the price that goes towards paying off the subsidy. Service plan costs would be exactly the same as they are today even if subsidies were abolished.

I mean I've Verizon and always knew I was getting ripped off by the shear nature of a premium carrier, but the fact that when I'm sitting on an upgrade I'm still getting gouged is pretty lame. I'm waiting to upgrade to the new G'zOne Commando guess if I couldn't afford it, I would go totally prepaid but I really like the phones I like....I will also be falling in line with all the other drones and giving up my unlimited data shrug getting me coming and going i guess

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...
(continues)

How does subsidy amount factor in for the add a line charges? Are consumers robbing from the big 4 if they have more than 2 lines?

A few of us always catch hell for this, but the wireless industry is running amoke without much of a leash. Regulations please!

I want to commend Phone Scoop for bringing this issue to the front again. While we purchase phones, most tech geeks are aware of the shady practice. However, most consumers are not. They don't generally read the print of regular price. They only see what they are paying out the door. I have said for many years that this is a scam. Yes, I understand the price to offset the subsidy, but as stated in the article, the end of contract bill should reflect a satisfied pay down on the phone and forego the 20 dollar charge. Otherwise, we are still paying for a paid off product.

Regulations need to be implemented ...
(continues)

...yeah, you'll save a boatload of money. I did by going with Virgin and paying just $149 for an LG Optimus Elite.

But then you get what you pay for--which is to say, not much, as Virgin's coverage and data are absolutely dreadful. I'm currently trying to figure out if I'm going to sign up with AT&T.

One other thing I believe having subsidies inflates is the non-subsidized cost of phones. Would anyone ever at this moment be purchasing a Samsung Galaxy S 3 if it's cost was $599.99 (current price on VerizonWireless.com off contract)? I bet not, so they would have to lower the price right?

What I'm not liking is tmobiles current contract requirement for the so called value saving of 20.00 a month. I could come to them for a value plan and still be forced into that contract regardless of me bringing my own phone. That's the lop sidedness about the deal.

This isn't about their new rumored changes regarding the un-carrier plans coming.

Fantastic Article, Rich. I thought this nailed all of the topics of what is going on in the wireless industry and trends today. I like the fact that T-mobile is going from Classic to Value plans with the ability to pay over 20 months but once the 20 months are over or if you want to pay the phone off quicker you can upgrade whenever you want. Moreover, as you noted in your excellent article, your plan drops $20 per month. If you have a discount even more.

Well said all around

Adam. (Aka Nextel1😎

The article does over simplify the phone subsidy argument, but it certainly is more complicated than slapping a $20.00 value on a phone subsidy. Quite frankly, I think its closer to $30.00.

While comparing prepaid prices to post paid prices seems like a good standard, there is a bigger picture. Prepaid simply does not have the same overhead and risk postpaid plans have. They typically do not have expensive retail stores to maintain, call centers full of upper tier tech support and finance. They also do not have to endure the risk of customers abandoning accounts. Also, prepaid carriers do not have to worry about roaming.

On the flip side, post paid plans get the luxury of overages, late charges, extra charges and features, and q...
(continues)