iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Comcast
| reply to Matt
Re: Wow I really hope they dont Nothing stopping you, as long as you switch carriers.
AT&T automagically adds a data plan to any SIM that touches an iPhone, or so I'm told.
Also, your iPhone was subsidized. The iTouch isn't. Considering the (unsubsidized) price of the 32GB iTouch is the same as that of the subsidized 32GB iPhone, I don't see a problem here. |
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| Not to pick on you guys specifically, but it always annoys me when I read: subsidy.
There's no such thing as a carrier subsidy.
A subsidy implies you're getting something for free. No wireless carrier is doing that. What they're providing you is financing.
When you get a loan to buy a car or a mortgage to buy a home, that's financing. The lender isn't giving you something for free. Quite the contrary, you're paying them back and then some (a lot in fact).
Proper lending is (sort of) regulated, there's legislation and regulations dealing with all that. The terms need to be spelled out. They required to provide you with critical info like: principle (amt borrowed), interest rate, total interest payments over life of loan, etc.
But unlike traditional loans, wireless contracts aren't like that. There's opacity and subterfuge as far as the eye can see. The wireless carriers want it like that so they can bundle the financing costs with the cost of service, and you don't know the difference.
If people understood that $20-30 of their monthly fees paid for their phone, and the effective interest on it is really 10-30%, they'd see it for what it really is:
A scam. |
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 jmn1207Premium
join:2000-07-19
Ashburn, VA | The reason "subsidy" is used is because, for all practical purposes, the phone is heavily discounted, or free, since the cost of service is no different for a phone purchased outright.
I could have spent $600 for my Blackberry, but I would still end up paying $99 for the Sprint plan that best suited my usage. The only thing I could save on is the early termination fees. And the major carriers have been doing everything they can to try and make it as difficult as possible to take your equipment from one service provider to another.
Until I am offered a significantly discounted service plan with the features I want by bringing my own phone to the game, the cost of the phones are mostly considered to be subsidized. It's just the way the system works over here. Things are much different in other places around the world, but ours is an economic culture that relies heavily on credit and financing. What other people carry as much debt?
Right or wrong, welcome to the US. |
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| reply to Samsonian
This also works in favor of the carrier because you don't know how much of your contract is for service and how much is for the the handset.
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| said by jmn1207:The reason "subsidy" is used is because, for all practical purposes, the phone is heavily discounted, or free, since the cost of service is no different for a phone purchased outright. Until I am offered a significantly discounted service plan with the features I want by bringing my own phone to the game, the cost of the phones are mostly considered to be subsidized. said by clickie:This also works in favor of the carrier because you don't know how much of your contract is for service and how much is for the the handset. That's the whole problem.
There's no incentive for buying your own phone outright in the U.S. Wireless carriers bundle the cost of service together with the cost of the phone. This hides the true costs.
To add insult to injury, people think they're getting a good deal under this system. A "subsidy," despite it being completely illusionary.
I don't think this will change unless the government requires the cost of financing to detailed/itemized separating from the cost of service. We require the cost of most other types of loans to be detailed, this isn't any different. |
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MRCUR
join:2007-03-09
Columbia, PA | reply to Samsonian
Carriers subsidize phones plain and simple. That's what it's always been called and what it's always going to be called. I would rather pay $200 for my iPhone and be locked in with AT&T for another two years than pay $600 - heck, my monthly prices don't change anyway (which is exactly your point it seems). |
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| reply to Samsonian
Subsidy doesn't imply that you're getting something for free.
It means the cost is subsidized by other means, which can include free, but it doesn't.
Every carrier offers subsidies on every phone they carry.
The difference you pay for the phone is subsidized by the 1 or 2 years you agree to be a contracted customer of the carrier.
This is the only way to make the phones affordable to the majority of people.
If you want an unsubsidized phone, they are available. So no one is getting screwed that isn't choosing to get screwed because of their finances. |
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| said by nukscull :
Subsidy doesn't imply that you're getting something for free.
It means the cost is subsidized by other means, which can include free, but it doesn't.
So when you buy a car, and the dealer provides you with a car loan from the automaker's financial division (i.e. vendor financing), the dealer is giving you a "subsidy?"
If you guys believe that, it explains our nation's financial illiteracy.
The difference you pay for the phone is subsidized by the 1 or 2 years you agree to be a contracted customer of the carrier.
Once again, that's a loan. A contract in which you're provided something up front, and then a series of payments are obligated, is a loan.
I'd like to emphasize, I'm not against the concept of financing at all. It provides capital, so people and businesses can make purchases that few could afford to make all up-front.
I'm against shady lending though, which is what wireless carriers are essentially doing. They're hiding the terms of the loan they're making, they're hiding the effective interest rate, hell they're even hiding the fact that a loan was even provided. They're playing a game of hiding the ball.
The cost of the financing and the cost of service should be broken out separately, and detailed. Only then can people make informed decisions.
If you want an unsubsidized phone, they are available. So no one is getting screwed that isn't choosing to get screwed because of their finances
So you pay lower fee for service when you bring your own phone purchased outright?
No.
There's no incentive to do that, because you'd be getting screwed. By paying a service fee that included financing for a loan you didn't receive.
What I'd like is simply disclosure and transparency of the loan made and the service provided, just like we'd expect from any other type of loan. |
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