And you can argue that prepaid phones don't sell for $500 or $600, but even with prepaid phones, there is a subsidy built into the pricing as well. The carrier makes back the subsidy from the per minute usage.
I believe in the free market but I think we are at a important time in America with the way carriers operate.
The biggest growth carrier has been metropcs the past several years. The public is stsrting to shift towards more prepaid models. But at the same time the public still wants cool android phones iPhone etc with hacking it to work on boost mobile, metropcs, straight talk, etc.
The post paid carriers like AT&T Verizon and Sprint need to figure out the best solution. I prefer the tmobile system of not mandating data as long as you buy your own phone outright along with giving post paid customers a little break on monthly plans.
Unfortunately tmobile is a distant fourth and consumers never took to the tmobile system.
Maybe Americans are too set in their ways not to pay the full $500-600 for the phones in exchange for lower monthly plans?
So Verizon and other two carriers resort to these added fees.
There are plenty of unsubsidized devices for sale on the free market that have never been offered by a carrier. People don't generally know about them or buy them because they are so expensive.
1. If a contract's ETF is an indicator of the amount of remaining loan (subsidy) payoff, then why doesn't the ETF go to zero in the last month of a contract?
2. If a customer pays full price for a phone or brings in a phone they purchased elsewhere, then why does that customer pay the same monthly rates as a subsidized phone customer?
In the case of wireless providers, their opaque business practices prevent customers from understanding precisely how their fees are applied against the subsidy, but because these aren't "loans" (in the banking sense), they can charge you whatever effective interest rate they want to without fear of violating usury laws. For example:
Let's say a phone's subsidy amount is $350. The monthly payment for 2 years (24 payments) at 10% interest is $16.15/month. At a high consumer interest rate of 20%, the monthly payment is $17.81/month and at a criminally high 30%, the subsidy payment is $19.57/month. A monthly subsidy payment of $25, which shouldn't be hard to imagine on a typical Verizon bill, would represent a 59% loan rate.
The wireless companies have a sweet deal going and so long as they keep up those lobbyist payoffs coming, they'll be able to keep on using their outrageous financing schemes.
The ETF does go to zero when you finish the last month of your contract. That's how being out of contract works.
Sent from my DROIDX using Tapatalk
Is it still $10 each month of service?
If Verizon allowed all "Verizon certified devices" on their prepaid service without any hacks or tricks we would all be happy.
But no. Verizon and AT&T make it hard to use devices on their prepaid services.
If I'm annoyed and you're annoyed, does that make us a paranoid ??
Sarcasm is a fine art...
"Don't believe everything you think"
It's not a matter of if you win or lose, it's how you assign the blame
It would make more sense for Verizon to increase their prepaid by letting all Verizon devices in their prepaid.
Also would make more sense to essentially give away the iPhone for free on contract for the primary lines (in a family plan) but decrease the subsidies for non primary lines in a family plan.
And still charge $199 on contract for single line contracted plans.
That's the best way to maximize profits and increase the user base prepaid and postpaid. You make money both ways.
They are way too strict on prepaid users almost to the point of it being a true pain.