T-Mobile Says Device Subsidies Are Bad, But Change is Hard

[Marcus52]

I've always thought the model was - dishonest, at best. All those "free phone" offers? Screw you! I just got to where I said (when they would call on the phone, before I got on the "Do not call" list) "Sure, send it out!" Of course, the answer was "Well, uh, you need to sign a contract."

"Well then it isn't free, is it? Which makes you a liar."

They certainly and obviously don't charge a carrier more than an end user for a phone, but they charge them quite a bit, and one thing it points out is how much money they make off of your subscription. Those phones aren't free for anyone, you are just signing up for a "pay (for the phone) as you go" plan - one that never ends, because the price doesn't drop after the phone is paid for.

I suspect that one reason Brodman wants to see the sales method go away is that there is not as much per-minute profit on the services as there used to be when the model was established; it takes longer to get the company's investment cost back than he would like.

The "incentive" I want is a lower cost on my service, not an introductory price break that I pay for in said service, ultimately many times over.

 

[dalethepcman]

[citation][nom]alidan[/nom]i want a use iphone or android, one of the better ones, to use as a bar code scanner/portable camera. if i go through a store... well i get screwed there, because they sell it barely cheaper than newif i go through a person... well i could spend 1-200$ on a stolen phone and if found out by cops, ill be out a phone and 1-200$ because of stupid laws.[/citation]

If you only want it for a barcode scanner / camera then you don't need a high end device. Buy an ipod or cheap android handset.

 

[wiyosaya]

[citation][nom]jojesa[/nom]I would agree to pay the full price of the hardware if T-Mobile will have a better service plan: Unlimited service for $39.95 (voice, data, text).They all overcharge for the hardware and service, that is the only reason we sign two-year contracts.[/citation]
100% agree on this.

 

[Guest]

Elsewhere the nations of the world pass by-laws on this subject so they don't end up as paperweight when phones are off the plan they were designed for, either flat no-locked true freedom up-front or providing free unlock code after off-contract or off market. US should do the same.

Besides what ground do they have to "lock" phones if the customer did sign a contract be $3/4/50 a month? The networks did get their end of refill. CDMA can be unlocked in theory, just costly since it was CR @Qualcomm, anyway you slice it this was an ealy-adoptor short-sight by the networks since GSM is superior to CDMA in early 2G times in every way and even now GSM is "just better" in a lesser way.

 

[DaveUK]

[citation][nom]amdphenomx4[/nom]Or you know, they could make phones cost on the level of tablets. It does not cost over 200 dollars to make most phones. Sell them around the price of tablets. 400-500 dollars. The manufacturers wont though, as they sell them for more than this to the carriers, and thus make more monies.Tl;Dr Tablets should be more expensive than phones, not the other way around.[/citation]

I don't understand this logic - since when have smaller computing devices cost more than bulkier counterparts?

If manufacturers are cramming similar processing power (iPad 2) into a much smaller form factor (iPhone 4S) then surely this requires significantly more technical effort to work within the thermal and power constraints of the smaller form factor?

We see a very similar concept in the laptop vs desktop space, where the top-of-the line mobile GPUs perform comparably to a mid-range desktop GPU and yet are priced significantly higher.

I think you're also missing that the mobile phones are 3G/4G by default, whereas the cheaper variants of the tablets are WiFi only. Once you start comparing the 3G version of the tablet to the nearest equivalent smartphone, the pricing tends to even out considerably.

 

[keczapifrytki]

he said T-Mobile's competitors don't seem to want to do the same, which makes it hard to compete.
As far as I know, it is illegal to meet with your competitors to discuss getting everyone together in the act of ripping off customers. Something to do with monopoly laws, and price fixing. If you want to do something like that, just do it and suffer the consequences.

 

[Guest]

[citation][nom]keczapifrytki[/nom]he said T-Mobile's competitors don't seem to want to do the same, which makes it hard to compete.As far as I know, it is illegal to meet with your competitors to discuss getting everyone together in the act of ripping off customers. Something to do with monopoly laws, and price fixing. If you want to do something like that, just do it and suffer the consequences.[/citation]
You missed the point.

 

[matt_b]

If they want to drop subsidized plans, that's fine. Just when they do so, they need to knock-off about 20% of the bill so that we, the consumer, can receive the savings that they incur. Prices are bad enough, but if they drop subsidizing AND keep the price structure in place - that's not going to work. I see what he is saying though about being throw-away, I say to that though that the consumer LOSES money by not upgrading at 18 months; anything past that time-frame and we're paying for a benefit we're not utilizing through the monthly bill still. If they would offer two style of plans: one subsidized with current pricing, and another non-subsidized with a decent discount - count me in!

 

[velocityg4]

I op[citation][nom]hoofhearted[/nom]Your logic is flawed. Your are not paying a lot more money because the carriers do not offer a cheaper price when you bring your own phone. They are ass-raping us with jackhammers in this country. There are only two GSM providers which means you can just get another simcard. All of the rest are CDMA which means they lock the phone to their service anyway and blacklist others.I am sure this t-mobile ass-clown is just saying this for good pr. If they really were about the consumer, they would discount your rate after your contract was up.[/citation]

I bought my iPhone 3GS and jailbroke it to use with T-Mobile instead of AT&T. For the same minutes, unlimited text and internet I save about $480 a year on my T-Mobile plan. Sure I only get edge speed on the internet (tested at 160kbps). That is plenty for e-mail, maps and the occasional web search. For the most part I use my phone around wifi access. That extra money each year is not worth it to speed up the odd web search.

Once you factor in the subsidy I'm still saving $500 to $600. I also bought used which made the savings much greater.

Unfortunately T-Mobile no longer offers their cell phone web plan (which was edge only). So now you'd have to get a more expensive 3G plan and still have only edge access. There would still be some savings though.

 

[Guest]

Yeah, it confuses customers, that the prices aren't all 600 dollars. So they get rid of their phone in 18 months. Okay... Maybe the price of the phones should reflect how much they acutally cost to make.

 

[NuclearShadow]

The fact is most people do not have $600 to throw down on a phone. Do subsidies suck? Sure but the average consumer depends on them to get the phone they desire. Then there is the problem of will the carriers actually lower the prices? If I buy a OEM phone and get a 2 year contract with T-mobile and get the same plan with someone who used subsiding I won't get a cheaper monthly rate. The fact is if subsiding ends the service price will likely stay the same. People have shown that is what they are willing to pay therefor that is the price it will be.

Oh and just for the record I have had terrible experience with T-mobile everything from service to billing. After the contract ended and we made it clear we did not wish to continue service they charged us for about 4 months more despite calling them each month where they would refuse to take away the charges but ensured service would end next month. This happened for four months straight. Go with anyone but T-mobile.

 

[TheKurrgan]

Lets look at the OTHER side of the equation.. Manufacturers have inflated the price BECAUSE the carriers subsidize the price.. If they had to compete on their own merit, we'd see most android phones around the 300 mark any way, some even less. Apple would probably NOT be the king, and in all likely hood we'd see MS/Nokia become the biggest cock on the dung hill as nokia is good at producing phones that work for a decent price.
Like most industries in the US, its all built off greed, not providing good service. Because of the GSM/CDMA split here in the US, our options for an unlocked device are limited any way. AT&T is a pain, but T-Mo is despite any other belief, a pile of junk carrier. Since the whole purpose of a mobile phone is to work in as many places as possible, Tmobile has a pathetic coverage foot print compared to ATT/Verizon.. hell even sprint.
CDMA carriers also REALLY screw you, since all CDMA devices are compatible with all CDMA carriers here in the states as far as hardware goes, they are king of device locking as phones on a CDMA network are glued to that network for life, at least in a purely "legitimate" sense. (forgetting flashing to metro / whatever)
That said, with the continued privatization of spectrum and carrier greed, the manufacturers loving getting their pockets lined with a high profit margin because of carrier subsidies, we are REALLY lucky we only get screwed as hard as we do here in the US.
Now for a purely personal opinion: Verizon is the least of the evils. Yes they completely glue their devices to them. However, they do invest more by a large margin than any other carrier into making a decent network for a customer to use, while still keeping prices on the level with the competition. So if I had to pick a carrier, I'd pick Verizon every time. (I also am a big believer that CDMA (for what its worth with LTE almost ready to take over completely) is the superior technology for use as a cellular network)

 

[tramit]

I'm not sure if this is new. Tmobile has a family value plan that they offer that lacks the upgrades and subsidized phone options for a lower price. The only con is they still make you sign a two year contract to get that plan as well. I love using phones like the Sensation XE, GN, and other phones not carried by them so this was the best plan for me since I wouldn't buy anything they have anyway.

I could have kept my old plan with my grandfathered T-zones but it got old fast worrying if they would eventually drop me or being limited to a small selection of handsets. I could have used my upgrade anyways which would include the 200-230 handset, 30 upgrade fee, and taxes on the original cost of the handset: sold it and still be at square one. But now I don't have to argue for them to waive the upgrade fee or deal with the hassle of reselling.

 

[stevelord]

Tmobile also nails you for $200 migration fees, even if you do not break contract. Look that up. They've gone downhill since being infected from ATT dealings. Didnt go through, but still made contact.

 

[lamorpa]

They are not subsidies. You are financing your phone. Who thought they were subsidies?

 

[lamorpa]

[citation][nom]TheKurrgan[/nom]...Like most industries in the US, its all built off greed, not providing good service.[/citation]

Grow up and move out of utopia. Business is business. Which other socioeconomic system have proven to work better than free markets?

 

[hoof_hearted]

[citation][nom]panders4[/nom]You have to switch to a prepaid plan if you want the cheap off contract prices. I only pay 30 bucks a month for a smart phone with 5 gig of data on T-mobile. It's good enough for me.[/citation]

I actually tried the prepay rout myself once for a month. Didn't go with tmobile as a buddy of mine has it and he can't get crap in the building we are in. So I tried the ATT prepay. It was 50 bucks and was supposed to include data, but not for use with smartphones. I figured that since I bought my GS2 unlocked ($600), that this shouldn't apply to me. Not true, ATT uses the unique identifier of the phone (IEMI or something like that) to blacklist it from the data (tried changing apn, but no go). They said I could buy one of their 2GB data plans for another $30. So at this rate, I was better off with my current plan. So I might as well get the "add 2 years to your contract" deals and get new phones since I am paying the subsidies anyway.

 

[cknobman]

Its the consumers fault because:
a. The majority of people are stupid
b. People want what they really cant afford and subsidies (just like credit) make that possible.

Same principal applies to all areas of the American economy, why the frack do you think we had the entire housing crisis????????

 

[hoof_hearted]

[citation][nom]shoooooggggggoth[/nom]Actually, your post is flawed because you quite clearly can talk shit but you're too dumb to do a little research first. T-mobile offers a ton of plans that are cheaper without a subsidized phone. Value plans are cheaper with a sim card, monthly plans are cheap and don't include a phone, and prepaid plans are cheap. Using a value plan you can get the same thing on Tmobile as on Sprint for $30 less, without a phone[/citation]


And you are an idiot. Tombile service in my area just sucks or is non-existant. AT&T prepaid, by the time you get through with all of the nonsense actually cost more than the contractual price for the same level of service.

 

[keczapifrytki]

[citation][nom]ivan1984[/nom]You missed the point.[/citation]

I didn't miss the point. I am merely pointing out that it seems to me that T-Mobile Chief Marketing Officer Cole Brodman is meeting with other carriers to make changes in the cellphone industry. Changes that might not necessarily be the best thing for the customer.