

Are Customers Addicted to Handset Subsidies? - edent
https://thelab.o2.com/2013/03/are-customers-addicted-to-handset-subsidies/

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bhb916
I don't think customers in the US and UK markets are addicted to handset
subsidies -- they just don't know any better. I recently moved to an MVNO that
uses the T-Mobile network and three-months in I really couldn't be happier.
More than that, everyone I share the story with is extremely interested in my
experience. It's really just a matter of time.

There are two hurdles that I see: First, the lack of cheap, available,
unlocked phones. I can afford the upfront cost of a Nexus 4, but I know many
relatives who cannot. Even so-called "dumb" phones run $100 or so and
selection is extremely limited. Second, many professionals I talk to get their
phone and service from their company. As we all know, corporations are slow to
change especially when it comes to telecom (evidenced by the sheer number
still issuing BB phones).

I see T-Mobile trying to address these hurdles by bringing a trusted brand to
the no-contract/non-subsidized market. I hope it works out for them.

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cleis
The point made by Legere (T-Mob CEO) a few months ago was that we need to
start seeing handsets for the sophisticated, lasting, pieces of technology
that they are. He argued that handset subsidies have pushed us into a mindset
where we see our phone as disposable, destined for upgrade every 2 years. When
we take this perspective there is no shortage of available phones, we should
just be comfortable with upgrading our handsets much less often than we are
currently accustomed to.

Also, T-Mobile still allow you to pay off the cost of your phone over the
length of the contract, so people will still be able to get state-of-the-art
phones for a low upfront cost.

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gadders
That would be good if phones lasted more than two years without
malfunctioning. My S2 is now coming up to 18 months and repeatedly crashes.

I could imagine paying £250 for a Nexus 4 to keep for 2-3 years, but not £600
for an iPhone.

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dfxm12
Is the cost to repair the S2 less than the cost for a new one? Maybe all it
needs is a fresh install of Android. Of course I understand that you can't
always simply reflash your phone, especially locked ones (as subsidized phones
usually are).

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gm
This strikes me as a very dumb question. For all the answers to this, simply
look at the credit card industry and consumer motivation to spend money they
do not have.

People want stuff they cannot afford, so they spend money they do not have, it
costs them dearly. That's how the system works; not that I advocate it.

It takes considerable effort to get out of the cycle, especially for people in
consumerist USA.

The way I look at it is: If they ask me for my social security number, then I
am getting a loan, and so I do not go through with the transaction. For my
prepaid phone I spent $250 for the phone, and I pay $19 monthly. No SSN
required. For a phone plan, I would spend $0 (or whatever for a higher-end
phone), sign a contract, provide my SSN, and pay monthly over at least 2
years.

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ZeroGravitas
That's a refreshing tone and message for an official telecoms company blog.

He mentions that the no money up front phone is like buying the phone on a 38%
APR. I think that's exactly how people in the UK look at it. If you don't want
a fancy phone then quite a few places will give a PS3 or similar device
instead, which you pay up over your contract. It's just an obfuscated credit
purchase. I've even seen offers where they basically give you cash up front in
return for your monthly fees.

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chiph
My subsidy is up this summer, and I may switch. One thing -- if you look at
T-Mobile's coverage map, make sure you zoom in far enough. At low levels of
zoom, it shows green. But at higher zoom levels, the map shows only 2G
coverage in some of the places I care about.

<http://www.t-mobile.com/coverage/pcc.aspx/>

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nuclear_eclipse
Isn't that true for all carriers though? Verizon is generally considered to
have the "best" coverage, but at my apartment and my job, the signal on my
company Verizon phone is definitively worse than my own T-Mobile handset or
co-workers' AT&T devices...

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jinushaun
We're not addicted. It's just that until this T-Mobile thing came around,
subsidized and unsubsidized plan had the same cost. My Verizon bill would be
the same $80 whether or not my phone is subsidized. It doesn't cost less. So
there is no benefit to buying an unlocked phone in the US for more than $200.

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pfortuny
This is what Cesar Alierta (Telefonica's CEO) dared say aloud... "Spanish
customers need an education".

Like he was our father, man.

