
Kill the Wireless Contract, Buy Your Own Phone - peterkrieg
http://www.wsj.com/articles/kill-the-wireless-contract-buy-your-own-phone-1424807865?mod=WSJ_hps_sections_tech
======
taylorwc
> That $199 iPhone? It really costs $650!

It's been really nice to see unsubsidized wireless become more of a thing in
the US. I can't even begin to describe the confusion my family members have
when I tell them that their iPhone actually cost $600-700. Their response is,
"oh, no, it was only $200." It's astonishing how misunderstood this is... like
saying you financed a car purchase and it only cost you the downpayment.

~~~
derekp7
For the car analogy, it is like the car cost you $1000 up front, but you have
to buy a specific brand of gas for the life of the car. Which could be a good
deal, since you have to buy gas anyway, as long as that gas isn't much more
expensive then other brands of gas. And if that brand is available in all the
cities that you drive.

~~~
vog
_> Which could be a good deal, since you have to buy gas anyway_

Is there any market where this has ever been a good deal?

For printers, mobile phones, etc. I'm not aware of a single example.

Maybe renting a flat is a model where this works, compared to repeatedly
buying and selling your house whenever you move. However, maybe this just
works in countries like Germany which have very good laws to protect
customers/lodgers.

~~~
Agustus
The question is how you see it as a good deal.

If you need to defer up front costs and facilitate it through increments then
yes.

If you see it as the total cost, then it is not a good deal.

------
joezydeco
Article doesn't mention that T-Mobile will let you buy that $650 phone in
installments if your credit is good.

So you can still get that new handset and pay for it in your monthly bill, but
now you have the option to pay the remainder off at any time and switch it
out/sell it/change carriers/etc.

~~~
kasey_junk
Pretty sure that Att also offers this.

~~~
urda
Yup, it's the AT&T Next program. I'm on it right now with my iPhone 6+, so at
the end of the payments I have paid the phone off in full.

~~~
Bedon292
If you use Next to upgrade you are actually losing the money you pay each time
you upgrade. The math works out better if you buy the phone straight up and
resell it every time a new phone comes out which you want.

~~~
btgeekboy
Given that Next is effectively a 0% interest financing plan with no prepayment
penalties, it's easy to compare the market rate for your used device vs. the
amount of remaining payments you still owe and make the best choice from
there. (That "best choice" could be driven by financial reasons, or by
convenience.)

------
ISL
Sad to see that Ting was left out of their list of MVNOs. Ting just added GSM
service, too, so they offer service on both the Sprint and T-Mobile networks.
Sprint roams on Verizon, so there's no loss in voice/SMS coverage by
switching.

There's a thriving used market in phones at Glyde, and Ting's refurbished
phones have been great.

I've heard good things about the other MVNOs too, but haven't tried them.
Decoupling from Verizon was a great financial move; as a bonus, I'm actually
happy about my phone company.

(Disclaimer: I'm both a happy Ting customer and happily own a few shares in
Tucows)

~~~
akhilcacharya
The problem with Ting is that it is not designed for people that use their
devices exclusively with data, like me.

~~~
pzxc
Why do you say that? I think it's perfect for that situation, because Ting
allows you to set alerts or even hard limits for going over certain usages.
(hard limit can be anything, even zero)

Ting will let you set your account so it is impossible for you to use minutes
or text messages. (Or cap them at a certain number) That's perfect for data-
only usage, isn't it?

------
cpursley
I can't praise Republic Wireless enough - it's a wifi/cellular hybrid Motorola
phone. My phone bill is $25 a month for unlimited 3G data. Was able to make/
receive calls to / from the US in Russia last summer with no issues. Paying
$100 for a contract phone is insane.

~~~
Glyptodon
Recently switched to Republic and am quite happy. I initially signed up for
the 4g service, which is roughly $46/month after taxes/fees, but I'm realizing
I offload over 90% of my usage to WiFi, which is making me reconsider one of
the cheaper 3G plans.

I've also been shocked by how great the call quality it is (I can often make
out what people talking in the background or on the radio on the other end of
the line are saying), but it's probably more related to my previous phone
being terrible than anything else.

I've always been surprised that contract carriers are so popular when you end
up saving hundreds with pay-as-you-go, even including up front phone cost. The
break-even point is frequently around a year from service start, so it's
always seemed like a no-brainer to me.

------
cicero
One benefit of an unlocked phone is being able to use a local SIM card when
you travel internationally. This could be a big savings over paying roaming
charges.

~~~
jwr
True.

And those US prices seem insane to me. As an example of what you can expect
with prepaid operators, here's what Virgin Mobile in Poland charges:

$5.1/month buys 2GB, unlimited sms, 100 minutes $7.8/month buys 2GB, unlimited
sms, unlimited talk time $16/month buys 10GB, unlimited sms, unlimited talk
time.

~~~
adventured
That $16 is about $56 when you adjust for the median household income
difference between Poland and the US.

I wouldn't expect my house, utilities, food etc to cost what the median prices
are for those things in Poland either.

The US is a vast country to try to build 99% LTE coverage across population
wise, which the US carriers managed to do. It cost a lot of money to pull that
off. Labor costs, spectrum rights (thanks FCC), et al. are far more expensive
in the US than Poland.

Check out what a plan costs on Swisscom, you're talking $80+ to get started.
That makes sense because Switzerland has a high median household income.
Nobody expects a $7 all-in phone plan in Switzerland.

~~~
maxerickson
Their customers also don't seem to care. AT&T and Verizon have a combined 220
million wireless subscriber lines (or so). This is pretty good evidence that
they don't particularly need to lower prices, regardless of whether they can
or not.

I'm not sure spectrum auctions are that big a deal, the companies are paying
months of revenues for decades of license.

------
rikkus
In the UK, mobile operators introduced 'SIM only' contracts a few years ago,
where you got a rolling monthly contract (you weren't tied in for more than a
month at a time), effectively giving you the flexibility of 'Pay As You Go'
but without having to bother with top-ups.

Initially, these were much cheaper than the year-long contracts, if you
already had a phone. Now, however, they have little advantage over a
'standard' 2 year contract, as they've made them much more expensive (if you
want a decent amount of data, which people who own smartphones do) and much
less value for money on a monthly contract than a yearly contract.

Now if you 'bring your own phone' \- and it's a smartphone, so you want some
data, a 'SIM only' contract allows you to choose between not really saving any
money, but being on a rolling monthly contract - a bit pointless unless you
plan on switching providers very soon or giving up mobile phones forever - or
saving having to buy a phone you don't need over 2 years, but still being
locked in for a year.

All this said, I've managed to get a year's service with Vodafone UK
(unlimited calls/texts, 6GB data) for £9/month effectively, due to cashback
and offsetting my Spotify premium that I was paying for.

My phone (that I bought from O2 and had them unlock) is a Nokia Lumia 635,
which is around £70 and is, well, 'functional'.

------
bnzelener
Really excited to see the MVNOs getting better service by licensing multiple
Tier 1 networks. I'm still using AT&T on a family plan, but only because
they've followed T-Mobile's strategy almost verbatim for the last year.

I grew up in Alaska (now in Colorado), and my parents in Anchorage don't have
home internet. Even in Anchorage, a city with 300,000 people, $60/mo will only
buy you 10Mbps of download speed with capped bandwidth, through the only cable
internet service in town. Now, with AT&T's rollover data I get about 45GB of
cellular data usage per month. I'm on the 30GB/mo plan, but most months we
only use 15GB, so the other half rolls over. Now, when I travel to visit my
folks, I can tether without any concerns. It's actually worth paying the AT&T
premium to be able to tether hassle-free. AND, in Alaska the LTE is way faster
than the entry-tier cable internet plans. For many people with cellular
service, it might actually be cheaper to use your phone as a hotspot in Alaska
than to have cable internet.

Glad to hear so many of you are having good experiences with T-Mobile and
MVNOs though. I'm so psyched for the future of data access!

------
cagey
I had never concerned myself with cell phones since the whole "get a 'free'
phone with a contract!" seemed like a total scam, and I didn't need a personal
cell phone, so I let my SO "do the needful". Recently I lost my corporate
iPhone, and was referred by a colleague to Cricket, which is a subsidiary of
AT&T. $35/month unlimited domestic calls/texts + 1GB LTE data (with
throttling, not cutoff, if the data alloc is exceeded) seemed like a great
deal compared to my SO's Verizon contract deal. I can use any AT&T compat
phone. Then I was informed by the Cricket salesman that a $100/month for 5
phones deal was available; we ditched the Verizon contract (paid a small
penalty for doing so): 2 kids now have phones, I have 2 (1 work, 1 personal);
all MotoG's ($25 ea after rebate). Recently Cricket bumped the monthly data
alloc from 1GB to 2.5GB (per phone per month, same price). There may be
somewhat better deals, but I'm quite pleased with the current deal, and NO
CONTRACT!!! Things can only get better...

------
glial
If you're willing to use an older phone, it's possible to find an iPhone 5, 5c
or 5s in the $225-275 range.

------
alkonaut
I don't really understand the reasoning here: because I sign up to a long
contract I expect big _discounts_ on calls/data (more so than I could hope to
find while shopping around different carriers with a phone I own). If
calls/data are the same cost as it would be without signing a long contract
then I expect the phone to be discounted instead!

If I could buy the phone and still get the same total cost (or even cheaper)
without locking myself to a carrier for 24 months then of course I'd do that?

Not sure if it's a local/EU law or something, but total cost is always listed,
and the option to buy the phone without contract is always given.

------
radiorental
I have the "excellent" oneplus mentioned and while it is a great phone I
should mention that I've had audio issues.

The issue I'm hitting up against is that even though the support is relatively
good, it's all through email and appears to be from China. Days can go by
before I get a response.

Now it looks like I will have to RMA, and it's taken a few weeks to get to
this point. This also means I will have no phone while they wait for my return
before sending out the replacement.

All in all, happy with this phone. But there's a caveat when buying from a non
traditional supplier - 'virtual' support.

~~~
cssmoo
Just buy two shit ones.

If you can't afford to replace it, can you afford to own it? Never rely on
vendor support; Motorola UK taught me that.

Two Lumia 630s here.

~~~
radiorental
"If you can't afford to replace it, can you afford to own it?"

With that logic I'd own two fields with a tent in each (o; I'm not an apple
fan but I do like the ability to talk to a "genius" in person.

And I guess that's the difference between REI and an ebay seller, Apple and
some no name Chinese equivalent. It's the premium you pay to get the comfort
in knowing there's going to be no hassles IF something goes wrong.

The build quality & specs on the oneplus is definitely that of a $600
flagship. The $300 price tag does not mean I ought to buy two to make up for
the lack of support.

------
discardorama
> Sadly, Apple doesn’t offer that sort of affordable pricing on iPhones,
> though you can save about $100 if you look for used models ...

Not true. Last year, I lost my iPhone in July, but wanted to wait for the
iPhone6. Verizon had a deal: a refurbed iPhone 4s, unlocked, for $150. I
bought that, and moved to a prepaid plan on VZW. $40/month, all in.

When the 6 came out, I turned the 4s in for a $200 rebate (and bought the 6
outright), thus coming out ahead.

One advantage of CDMA phones (like VZW) is that they also work on GSM! So you
have the flexibility of using any network, with the right SIM.

------
alimoeeny
I think I understand that people want to have the option to switch, but I
never, myself, had any reason to do so. I mean the differences between the
services different providers provide is not that much (for me) to justify the
switch. Maybe that is because I am on a grandfathered unlimited plan. Over the
years I have periodically (with every new iphone), reviewed other options and
never found the switch compelling. Anybody knows any reason other than "just
having the option" ?

~~~
Delmania
The cost is a compelling reason. Last year, my spouse and I terminated our
Verizon contracts, bought used iPhones on Glyde, and switched over to Page
Plus Cellular. Our monthly bill dropped from $110 to $65. Factoring in the
cost of the phones and the termination fee, the move will pay for itself
within a year.

------
Zigurd
Buying a $600+ phone is a little crazy. It shouldn't be a commonplace thing. I
don't want a phone I will regret landing on top of while skiing or biking or
just bumping into things. It's a triumph of marketing but it makes little
sense when you can get, e.g., a new moto E with LTE for $150. That's what a
good smartphone, with no glaring deficiencies, should cost.

$600+ for a tablet that you keep protected in your bag is a whole other thing.

~~~
WorldWideWayne
This is exactly how I roll. I will never pay more than $200 for a phone and I
will never, every pay more than $200 for a tablet or any computing device that
comes with a walled garden OS.

I did pay over $1,000 for a Surface Pro and I will do it again when the 4th
version comes out because that's a fully capable general purpose computer that
I use as a portable workstation and/or gaming rig. I paid $350 for a Dell
Venue 8 Pro because it's got full Windows 8, it fits in my pocket and the
battery lasts 13 hours. I can easily install Chrome with Adblock on these
tablets and it's faster and easier to setup than any Android or Apple device
that I've ever used because I've got way more control.

I even upgraded that little 8" tablet to Windows 8 Pro for another $100 so I
could add it to my company's domain and walk around accessing every single
company resource that I need with the same native apps that I use at my desk.

------
pretz
I've been using Virgin Mobile happily for coming on two years. $35/month for
LTE on my iPhone 5s is pretty much impossible to beat. Plus, I can get
tethering for $5/day if I need it while traveling.

Yes, it's Sprint, and their network isn't the best, but since I don't live in
San Francisco I've rarely had problems.

------
Bouncingsoul1
I always wonder when I read about TMobile from a US-PointOfView. In Germany,
TMobile is the "Verizon". I pretty much think they raise rates here in order
to have money for competitive rates in new markets, but as soon as they
achieve a certain marketshare they will raise their prices as well, happend in
Austria recently.

~~~
jcadam
Yea, I swore an oath never to be a Deutsch Telekom/T-Mobile customer ever
again after experiencing their customer service first hand while I was
stationed in Germany 10 years ago. They make Comcast look good.

I don't even acknowledge the existence of T-Mobile in the US.

------
seba_dos1
Wow, what a news! It's a mystery for me how people can come to conclusions
like that this late. I haven't bought any subsidized phone for like ten years.
I understand that with CDMA careers it might be hard, but with GSM? There's no
excuse.

------
cbr
I'll say again: I really like T-Mobile's $30/month prepaid unlimited data
plan. Combine with Hangouts for voice and Voice for text (who names these?)
and it's about the cheapest you can get for a smartphone.

(Tradeoff? Poor service outside cities.)

------
phkahler
I'm very happy paying $10 per month with Republic Wireless. I got the MotoX
for $300 up front. It's not exactly unlocked because they have custom software
for wifi calls and handoff. But I get "unlimited data" via wifi and if I
really want reliable data on the go there is a $25 plan, plus you can switch
plans with their app up to twice a month and have it prorated. Think you need
cellular data for maps? Get OSMAND and download the maps you need to your
phone.

~~~
freehunter
Everyone in the US gets unlimited data via WiFi.

~~~
Glyptodon
The key thing is that your phone's voice and data service is offloaded to Wifi
when possible, so you can use your phone from Timbuktu if there's wireless
there. IE You don't even really need a data plan with them as long as you've
got Wifi coverage.

~~~
phkahler
>> You don't even really need a data plan with them as long as you've got Wifi
coverage.

Yeah, last I checked they had a $5 per month plan that's wifi only. You can
still make calls and texts but you have to be on wifi. Not my thing, but they
have it.

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lscore720
This makes sense for so many people; I (continue to) feel it's really only a
matter of time.

