
Verizon will drop phone contracts, end discounted phones - jrs235
http://news.yahoo.com/verizon-drop-phone-contracts-end-discounted-phones-201530971--finance.html
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AdmiralAsshat
This should ostensibly be a good thing. I pay $300-500 upfront, and then my
bill goes down from $90/mth to something more reasonable like $60/70.

In practice, however, what I imagine will happen will be that they'll tack on
all sorts of fine-print fees and other obnoxious gotchas such that the end
bill will probably be about the same...plus the fact that I just paid $500 for
the damn phone.

Look to the airline industries. Did they stop their absurd baggage checking
fees when the price of gas went down?

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jessriedel
> Look to the airline industries. Did they stop their absurd baggage checking
> fees when the price of gas went down?

Well, baggage isn't costless to the airlines. In theory thing should be more
efficient if the consumer saw approximately the correct price. I just wish
Kayak would start showing prices assuming 1 checked back by default, and give
you the option to specify how many you expect to bring. That would remove a
lot of the incentive for those gotcha charges.

~~~
pavel_lishin
How often do people travel with checked bags? Even for a two-week trip, I
typically bring an overhead carry-on and a backpack.

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seanp2k2
Lots of infrequent traveler friends of mine will bring a full-size suitcase
for trips of a few days - a week. I personally love running off the plane and
into wherever I've landed to explore, but not everyone travels so light.

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briHass
Verizon still plays games with phones purchased through them, however. Their
new plan, "Edge", is only discounted to a reasonable rate if you also purchase
a phone from them through monthly installments. The cheapest phone they offer
that qualifies for this discount ($15/m) is $200.

So, no bringing your own device, unless you like paying more for the same
service.

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ck2
Except you can't bring your own non-verizon device, even if it is LTE, they
won't allow it on their network.

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adrr
I thought they couldn't discriminate on devices. When government auctioned off
the old TV frequencies, thats was part of the agreement. LTE is using these
bands.

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JoshGlazebrook
They can't stop you from using a device that technically works on their
network.

Say for instance you bring an unlocked AT&T iPhone 6 to Verizon. If you have
an existing sim card (all LTE devices have them even on Verizon), you can
simply swap your sim card into the device and it will activate automatically
and work just fine. However, if you take that device into the store and need
to get a sim card, they will refuse to give you one as they only activate
devices that are on their whitelist.

A way around it would be to just borrow someone else's Verizon LTE capable
smartphone to activate temporarily to get a sim card and then just swap it
into your device you want to use.

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zw123456
I think this should put price pressure on the phone manufacturers. With the
price tag of the phone out in the open, customers will now realize the actual
cost of the phones and start selecting lower price models. Most people do not
realize what the retail price of a phone is since it is so heavily subsidized
by the carriers.

~~~
fpgaminer
It also means people won't wastefully buy new phones every two years. Under
the contract system, customers were given the chance to upgrade their phones
every two years for free or whatever small additional fee particular phone
models would cost (e.g. iPhone would be $100, but a cheap Nokia would be
free). It was a waste not to upgrade, so oftentimes perfectly good phones
would get replaced just because you had to upgrade. It also meant renewing the
contract, allowing carriers to force customers into new terms every two years.

What an abusive system. For all of T-Mobile's faults, I'm glad I switched to
their no contract plan years ago.

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Lx1oG-AWb6h_ZG0
The trouble is, most flagship phones are made these days under the assumption
of a two year use. I bought a HTC One M7 two years back because it was the
best Android phone available then, but it's now barely usable: I have to
charge it twice a day, the camera has this ridiculous purple tint, the latest
Android is bog slow on it, and its out of warranty.

I've been using the same PC for five years with no problems, so I bought my
phone at full price from HTC thinking I'd use it for a similar lifetime, but
it's really a PITA to use now.

~~~
wil421
That's been my experience with Android phones. When I bought an S4 when it
first came out it was barely usable with all the bloatware from AT&T and
Samsung. The battery should run down within 8 hours. I flashed the Google
edition and it helped but I couldn't stand it. Same stuff happened after 12
months, decreased battery life, slow and sluggish.

Switched backed to an iPhone 6 when it came out and haven't looked back. It's
been great and the past 8 months nothing had shown down and my battery still
lasts a full day of browsing and Spotify.

~~~
walterbell
iOS8 battery life on pre-2014 hardware has gotten worse with each update.
Hopefully iOS9 will remedy the situation for pre-2015 hardware.

~~~
rashkov
I have heard quite a bit about that and I've no doubt it's the case. There's
just no priority for Apple to support their older hardware, although I think
it got somewhat better between 8.0 and 8.2.

If you're inclined to do it yourself then I recommend trying to replace the
battery. You can get a high quality one from ifixit for around $20-25 and it
does make a nice difference.

~~~
philamonster
I've an iPhone 5 purchased in January 2013 with a new battery from iFixit from
this past February and there are just certain apps that absolutely kill
battery life regardless of which release of iOS 8 I use.

Though Apple has made their new software versions for their new hardware I
think overall performance since early iOS 6 releases has been consistent on
iPhone 5+ with the various exceptions for bugs. The problem I see is with devs
for large deployments (Google, MLB, Yahoo, etc.) ONLY take into consideration
the new hardware. My MLB.tv subscription which includes At Bat app has become
such a drain on my battery since the start of the 2015 season. Even streaming
radio broadcasts will use 50% of my battery after 5 or 6 innings with the
screen locked as in NOT DISPLAYING ANYTHING! 2 years ago a Red Sox/Yankees
game (4+ hours) would use maybe 20%.

Weekdays, I get a couple hundred emails plus 10-30 calendar notifications per
day from personal and work Google managed domains. Easily that takes up 20-30%
over an 8 hour workday with all the fetch. Previous employer with Exchange and
push using Active Sync was maybe 10% usage per 8 hours. Weekends of course I
rarely see the drain at all in regards to mail.

Point is, I know I'm at EOL with iPhone 5 but I at this point can't really
blame Apple as stock (and on weekends unless streaming a ball game) battery
life is as consistent as the day the phone was purchased.

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aikah
In Europe less and less people buy subsidized phones.They want their
subscription as cheap as possible and without any string attached. It might
not be a good deal if you want an Iphone though,so they should keep that
option for Apple customers. But when you can get an android phone for 50€
there is very little reason get a 2/3 years contract.

However :

> Under the new plans, customers will pay $50 for 1 gigabyte (a price increase
> for both groups) and $65 for 3 gigabytes (a price cut). The 2 gigabyte plan
> is being discontinued, so customers will have to choose more or less.

It is fn. expensive when compared to EU prices. Why is that?

~~~
joesmo
"It is fn. expensive when compared to EU prices. Why is that?"

In the US, there are only 4 major cell phone carriers and their plans are so
similar in price, it might as well be a monopoly.

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rhino369
Does Europe have 4 major competitors in each country? I seriously doubt it.
It's probably the opposite. They have three or less true operators and they
each have more spectrum at a lower cost.

The cheapest option would be a single carrier regulated by government. But
they might not upgrade as fast. So we might have super cheap 2g instead of
expensive LTE A.

~~~
IkmoIkmo
We've got 3 major ones in the Netherlands. There's over a dozen carriers but
they all use one of these networks.

Not super familiar with the rest of Europe but the larger countries have 4
operators as far as I know, like the UK, Germany, Spain, France... but there's
also plenty of smaller countries that have four, like say Greece. Sweden afaik
has even 5, and the Ukraine iirc has 6.

Anyway it probably has to do with density. I was flabbergasted when I studied
in Canada and ended up seeing phone bills that were like 3x my own back home
where we have only 3 operators. But it's pretty easy to cover the size of the
Netherlands cheaply, as for Canada or say the US... different story. (although
in Canada regulation also played a big role, it wasn't a very competitive
market)

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asdrty
It doesn't sound simpler or cheaper to me. If you include the price of the
phone, it can easily end up being more expensive. And they still have a
different cost for people bringing their own phone...

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butterfi
I'll be curious to see if this has any impact on phone pricing. Without the
subsidy, I doubt as many people will upgrade as often, which will slow phone
sales.

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atonse
It shouldn't, since they're introducing installment plans instead. So your
monthly bill won't really go up.

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ilaksh
The contracts were a scam. Seems great at first, but eventually you realize
you already paid for your phone and are just getting fleeced. So you try to
leave one month before the contract ends for a service that is half the cost,
and they nail you for $200. Only your credit is already useless, so they don't
get the $200 and instead just get a lot of angry former customers.

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InclinedPlane
Ugh, I hate this article because it just buys into the industry PR
terminology. Buying a "subsidized" phone doesn't mean the big phone company is
cutting you a deal, being nice to you, and putting money in your pocket. No,
it's providing financing for a phone purchase at an effective APR of around
100%. It's ridiculously lucrative for them.

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IkmoIkmo
Exactly it's just a loan, buying a phone on credit and paying it off monthly.
It's like saying buying a home with a mortgage is buying a subsidised home,
just ridiculous.

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caseysoftware
While there is much celebration of the end of contracts, a contract has
benefits from each side. While you may not be happy with the amount you have
to pay, it can't change for the duration.

Now it appears that everyone will be month to month by default which means the
bill can (and will!) change at any time.

~~~
joesmo
A decent carrier like T-Mobile who has had no contracts now for years will not
do this, except to offer lower priced plans, which they have.

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IkmoIkmo
I like it, it means the purchase of your phone and your contract are separate.
This makes total sense from a consumer perspective, the fact they've been on
the same contract for so long is absurd.

Imagine buying a laptop with an internet subscription for two years. If you
happen to go on vacation or move countries, or sell your laptop to buy a new
one... well tough luck you're still paying for that, usually non-transferable,
contract for service you're no longer using. You can apply this to anything,
like buying a television with a two year cable contract, it's just silly.

That model worked years ago. Today we're seeing customers on the move much
more, and I'm personally seeing more turnover of equipment, too.

It doesn't really have anything to do with 'discounts'. Vendors weren't
running a charity and they're not ending any discount, they're simply
structuring everything a little differently, I think that makes sense.

Part of this trend is probably both consumer-driven (I wouldn't be surprise if
this was a response to a growing number of consumers requesting and
complaining about ending long-term contracts for sensible reasons like
switching phones, country or even simply carrier), as well as driven by
changes in law.

For example here in the Netherlands, a discounted phone is now seen as a loan.
And loans have certain legal requirements. For example when you advertise or
offer a loan, you must very visible (like a cancer warning on cigs) say
'Attention! Borrowing money costs money', which links you to a government
initiative to inform about the risks of loans. Another requirement is that the
vendor is transparent and clear about the costs of the loan, and it's in a
standardised format that is very hard to structure in a way that it looks
really good but really screws with you (like US payday loans). The loan must
also be checked against the de facto debt-service coverage ratio of the
individual if it's high enough, and then gets registered. All these things
happened recently in response to the learnings from the consequences of
predatory loans in the financial crisis.

And it is a loan, if you get a free phone but pay a higher monthly fee, it's
not much different from buying a house on a mortgage and paying a monthly fee,
only it's smaller in scale and timeframe. Because of this, the phone and the
data plan are advertised separately, even if they're sold as a bundle. You can
still get a phone with $0 upfront, but it's advertised as a loan transparently
and separately from the dataplan. I wouldn't be surprised if stuff like this
becomes a best practice standard worldwide pretty soon, and so perhaps
carriers are making changes ahead of time.

~~~
ild
Americans have very different attitudes to loans, compared to Europeans: you
do not borrow - you are missing out what life offers to you.

~~~
adventured
Given the very high levels of household debt in most of developed Europe, I
have to disagree with your premise.

See: Netherlands, Denmark, Sweden, Ireland, Portugal, Finland, UK,
Switzerland, Norway, Spain -- all of which have either high or very high
household debt to income ratios due to "loans."

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ild
I am talking about consumer debt.

