Verizon To Double Smartphone ETFs? > Lame

said by NOVA_Guy:

How is paying an activation fee, paying for a phone, then paying an early termination fee being fraudulent? Perhaps it's gaming the system a little, but those who are clever enough to do so should not be punished for it.

said by dynodb:

How is it not fradulent if someone signs a contract with no intention of honoring the terms?

Wireless providers sell subsidized phones at a loss in exchange for making the money back on subscription payments. It's unrealistic to expect them to sell (or give away) a phone at less than cost yet have no recourse against someone who doesn't honor the contract.

said by fifty nine:

It's probably not outright fraud, but it is perceived by Verizon suits as abuse of the system, hence the increased ETF to combat the perceived abuse.

said by jhboricua:

Fixed it for you.

said by fAcEtIOUs:

It isn't perceived abuse. It IS abuse if you sign a 2 yr contract to make money for yourself by flipping the phone for a quick profit with no intention at all of honoring the contract.

said by fifty nine:

Businesses are in it to make a profit. If you don't like Verizon you're free to switch to T-MObile, sprint or not have a cellphone (it's not a necessity by any stretch of the imagination).

said by fAcEtIOUs:

It isn't perceived abuse. It IS abuse if you sign a 2 yr contract to make money for yourself by flipping the phone for a quick profit with no intention at all of honoring the contract.

said by ptrowski:

That is why there is an ETF in the first place. If someone is going to turn and burn them they pay the ETF, everyone is satisfied.

said by dynodb:

Sure- just now the ETF is higher, and is agreed to by both parties signing the contract. You can still "turn and burn" the phone, but you're not going to be making much if any profit in the deal with a $375 ETF and thus have little incentive.

said by ptrowski:

Right. The name of the game then becomes volume I guess. I don't turn and burn, but an ETF in theory should be going down. They can charge more for the phone if need be.

said by dynodb:

Offering subsidized phones for under cost is the main incentive for people to sign a contract, especially after their intial one expired.

Sure, they could raise the price on phones and lower monthly rates a bit instead, but I'm pretty sure that most people would rather have lower initial costs instead of slightly lower rates.

said by dynodb:

How is it not fradulent if someone signs a contract with no intention of honoring the terms?

said by dynodb:

Wireless providers sell subsidized phones at a loss in exchange for making the money back on subscription payments.

said by dynodb:

It's unrealistic to expect them to sell (or give away) a phone at less than cost yet have no recourse against someone who doesn't honor the contract.

said by jhboricua:

[You assume they are selling subsidized smartphones at a loss. I've yet to see independent data that proves this. The fact that even if you pay the full price for a smartphone you are still require to sign a contract cast doubts on the whole the 'subsidized phone' claims by the cell carriers.

said by dynodb:

I suggest you check out the subsidized phone prices. Unless you believe that Verizon (for instance) is only paying $50 for the HTC Ozone (and less for other low-end smartphones), then it's pretty obvious the subsidized prices are far less than wholesale cost.

said by dynodb:

Surely you don't believe that the carriers pay nothing for the "free" phones they give away. Of course they're subsidized.