dslreports logo
site
 
    All Forums Hot Topics Gallery
spc

spacer




how-to block ads


Search Topic:
uniqs
2
share rss forum feed


LightS
Premium
join:2005-12-17
Greenville, TX
reply to rradina

Re: Verizon post-paid price drop?

Nothing happens. They stay high.

Phone price is recuperated by the carrier by the ETF.


elefante72

join:2010-12-03
East Amherst, NY

You are paying for it regardless, the questions are:

1. If they go to one year and the fee is in there, do you still need a contract? Having a 2 year contract is now crazy if you are paying off said device which was the "idea"
2. Do they lower the rates? I doubt they will on data, but if they don't this is a killer because you are paying the subsidy rate, plus an inflated phone price (they dont pay anywhere near $650 for a phone), plus any interest rate crap they would pile on.
3. Owning your phone is great regardless, however they need to unlock after you pay off, no exceptions.
4. If you are paying off your phone and it's out there, if you want to go global you shouldn't need to pay the carrier tax to go overseas (see 3).

The carriers hate to carry these phones on the books. The biggest thing that will happen is that people will stop paying $650 for a $200 phone, and margins will collapse which is great for the consumer.

I can't see why one would pay $650 for an iphone when you can get a Nexus 4 for $350 (other than carrier avail), but you will see Apple need to plug that market gap. A vast majority of people are not going to pony up for that fee once they start seeing pricing transparency.


clone

join:2000-12-11
Portage, IN
Reviews:
·T-Mobile US
reply to LightS

I keep seeing folks post this, and I'm not sure they know what ETF means. It means "Early Termination Fee". Obviously, if you don't terminate early (before your contract term is completed), you don't pay the ETF.

Therefore, the cost of the subsidy was recovered by the carrier through the cost of the service plan over 24 months. They didn't magically lose the $350-450 break they gave you on the phone.

That being said, one can argue that carriers aren't actually paying "full retail" for the phone (ie. I want to buy a new phone without subsidy and I am charged $649, the carrier is probably paying far less for the device), and one would probably be correct. But even if they are only subsidizing $200-$250, they are still making that money back.

At any rate, yes, the ETF protects the carriers investment in a handset subsidy should someone choose to end their service before the end of the contract period. This is why there are graduated ETF scales depending on how many months of the contract you have fulfilled. However, the cost of actually making the subsidy back IS by all means rolled into the cost of monthly postpaid service plan. This is why you don't have to pay an ETF if you fulfill your contract.

Not that I think Verizon or anyone else is really going to give anyone a break on the cost of the service plan if they buy their own handsets, but if the cost of recovering the subsidy isn't baked into the monthly service price, where exactly is it coming from?



LightS
Premium
join:2005-12-17
Greenville, TX

I'm not saying that we aren't indirectly paying for it.

I'm just saying... why renew a contract if you aren't getting a subsidized phone? There is literally no reason to unless you're getting a subsidized phone. That's what I was getting at..


nitros22

join:2004-11-03
Chicago, IL
reply to LightS

This is in no way true for high end smart phones. Plus it also depends how far into their contract they are in.



LightS
Premium
join:2005-12-17
Greenville, TX

said by nitros22:

This is in no way true for high end smart phones. Plus it also depends how far into their contract they are in.

I don't follow? Unless I misread?

ptbarnett

join:2002-09-30
Lewisville, TX
reply to elefante72

said by elefante72:

2. Do they lower the rates? I doubt they will on data, but if they don't this is a killer because you are paying the subsidy rate, plus an inflated phone price (they dont pay anywhere near $650 for a phone), plus any interest rate crap they would pile on.

This is the killer question for me.

I'd happily pay full price upfront for an unlocked iPhone. I don't need to pay $25/month, or whatever. But, I am NOT going to pay full price AND pay a monthly fee that includes the implied cost of a 2-year contract subsidy.

T-Mobile gets this. Verizon appears to be figuring it out. AT&T will have to get their act together, or they will be left behind.

I'm currently planning a extended trip to Europe next summer, and am hanging on to an iPhone 4S that will be out of contract this year. We'll buy a pre-paid SIM with a data plan, so we can use it for maps, tethering, etc.

nitros22

join:2004-11-03
Chicago, IL
reply to LightS

In Example. You buy an iPhone 5 16GB for $199.00 You sign a new contract. You keep the service for 6 month's then pay the ETF at about 300.00 that's the reduced price of the ETF. Verizon still loses out a maybe 1 to 200 bucks as the phone is sold to Verizon at full price unlike the android phones that are purchased in bulk at discounted rates but only for possibly 50.00 to 100.00 per handset. The ETF does not always recoup the cost of the phone. Now if the person was 4 months away from the end of the contract then in that case the ETF would recoup the remaining cost. its all about what phone and how far into the contract the person decides to bail.



LightS
Premium
join:2005-12-17
Greenville, TX

Ahhhh, okay, I misread your statement. That makes sense & I have realized that.


itguy05

join:2005-06-17
Carlisle, PA
reply to nitros22

said by nitros22:

In Example. You buy an iPhone 5 16GB for $199.00 You sign a new contract. You keep the service for 6 month's then pay the ETF at about 300.00 that's the reduced price of the ETF. Verizon still loses out a maybe 1 to 200 bucks as the phone is sold to Verizon at full price unlike the android phones that are purchased in bulk at discounted rates but only for possibly 50.00 to 100.00 per handset.

Interesting assertion. Got a link that shows Verizon pays full price for iPhones and $100 for, say Galaxy S3's? Cause it's not in their financials.

itguy05

join:2005-06-17
Carlisle, PA
reply to elefante72

I can't see why one would pay $650 for an iphone when you can get a Nexus 4 for $350 (other than carrier avail), but you will see Apple need to plug that market gap. A vast majority of people are not going to pony up for that fee once they start seeing pricing transparency.

Using that logic who would pay $699 for the Galaxy S3? That's it's full retail price.

And the iPhone 5 is still one of the top performing phones:
»www.anandtech.com/show/6324/the-···-preview

Outside of the HTC One X it's also got one of the best displays:
»www.displaysearchblog.com/2012/1···-design/

The Galaxy S4 will probably be faster with the iPhone 5s being faster and the Galaxy S5 will be faster, etc.


Topevoli

@comcastbusiness.net
reply to ptbarnett

Prepaid Verizon Service. $55/mo unlimited Text, calling and 2GB of Data. Google "Pageplus". Even has a monthly auto renew so you don't have to worry about losing service if you forget to re-up.

Buy an Iphone (FYI - not technically supported for this plan, do your own research!) and activate it on page plus. Tell Verizon they can take their $100+ a month contract and pound sand.