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T-Mobile executive: Get rid of subsidies on new phones

0. phoneArena posted on 08 Mar 2012, 19:58

T-Mobile's CMO Cole Brodman told a group on Thursday that carrier subsidies on new phones are hurting the industry and that it prevents carriers and OEMs from playing on a level playing field; he also says that subsidies are turning new smartphones into throw-away devices...

This is a discussion for a news. To read the whole news, click here

posted on 09 Mar 2012, 08:00

27. tward291 (Posts: 559; Member since: 14 Feb 2012)

you guys do know that tmobile already does this with there value plan were you pay a down payment on the phone and you pay off the phone for 22 months. as a result your plan is at a lower price. i figured tmobile would eventually switch to this only as the papularity of this plan has increased on there network its probably one of the reasons they dont have the iphone cause apple wants you to subsidize that cunt

posted on 09 Mar 2012, 10:51 1

30. cjjohnson86 (Posts: 29; Member since: 05 Jan 2012)

Actually this makes a-lot of sense. Regardless you still end up paying more on your bill in the end with subsidized/ contract phones. In many other country's, the full retail price is the only way to buy this phone, and the result is a much cheaper monthly bill. With T-mo I actually payed full retail price for my original galaxy S, but because of that my bill only came out to 49.99 a month for the 5gb of data, 1000min, and unlimited text. Where if it was on contract it was 69.99. ( This was prior to the data changes) That move alone save me $240.00 a year and $480.00 over 2 years, so that more then payed for the phone in the long run. People in this country just don't seem to think hard about opportunity cost. We don't want to pay 500-700 for a phone, but we will gladly pay up to 1000 for i-pads, guns, etc. Idk, what does that say about us???

posted on 09 Mar 2012, 11:01

31. tward291 (Posts: 559; Member since: 14 Feb 2012)

lol i mad you said that i just spent 450 on a glock but another reason you forget is that a gun is good for many years a lifetime even but a cell phone is outdated in sometimes the following month as for the ipad lol people love sucking apples balls

posted on 09 Mar 2012, 15:02

32. Jyakotu (Posts: 854; Member since: 12 Dec 2008)

Basically, he's all for prepaid. This could work IF all American carriers used GSM, but that is not the case. There are a lot of regional carriers using CDMA and both Verizon and Sprint use CDMA. Honestly, some phones aren't worth the price of $400+, hell, not even the subsidized $299.99 price.! But still, this isn't Europe where countries are smaller, hence, cell phone networks don't have to cater to billions of people like America does.

posted on 09 Mar 2012, 17:07

33. atheisticemetic (Posts: 377; Member since: 18 Dec 2011)

This is where i get confused why people always want "free phones" or the "cheap phone".....i would much rather pay out the ass for a smartphone and have a lower rate plan than have the cheaper phone and a stupid priced rateplan.

30 bucks times 24 months? you do the math

i'd pay 600 bucks for a smartphone any day of the week if it meant that i could make up for that cost on a cheaper rateplan in the end.

it's called INVESTMENT and VALUE.

I wish Tmobile was more popular for this reason alone that other carriers would jump ship on this "cheaper phones make customers happy" nonsense.

When will America wake up?

posted on 09 Mar 2012, 19:42

35. jjjsong (Posts: 75; Member since: 27 Dec 2011)

Not only will you get cheaper rates and make total spending after the 24 months less, you also have the freedom of leaving it and going to another network with no constraints (no ETF or anything like that)!

Many things can happen within the 24 months. Maybe after 2 months into your 2 years, another service provider has a cheaper and better plan that fits you better.

posted on 09 Mar 2012, 19:38

34. jjjsong (Posts: 75; Member since: 27 Dec 2011)

Unlocked phone is pretty much the model outside of USA (or at least in most countries).

That's why there is this concept of "world phone" because that's how it really should work. You buy the phone by itself, then choose the service provider you like. Since the phone has nothing to do with the service providers, the phone makers will make them compatible with all of them.

The issue here in the US is that people are too used to buy phones directly off service providers. The seemingly discounted phones are exchanged with you paying extra $$$ to them for 2 years (or you can pay the ETF, which would add even more to that).

Because of all that, the manufacturers then have to go through service providers to really sell their product. This creates these "only work on XYZ" phones because the service providers of course request the manufacturers specifically make the phone only compatible to their frequencies/network. (in fact, everyone having different frequency is another issue in the US.. but that's another topic)

A lot of people may think "oh I don't mind staying with XYZ for 2 years, and if I can get extras off the phones, that's even better". Yes it is and it works that way, too. In fact, it would work even better if US is under this no-locked model. Imagine that you can now bring your own phone and sign contracts with XYZ and perhaps get the first 3 months free?

This model will only open up to more competition and consumers will only benefit from it.

posted on 09 Mar 2012, 19:53

36. Lboogey6 (Posts: 281; Member since: 31 Jan 2012)

ok guys soo heres the deal remixfa has it right and iami67 i do appologize but you're incorrect when we got the plans it was dumb and didn't make sense but people are inately impatient and cant handle truths so when we compared pricing saving ten dollars is still saving ten dollars you pay full price for the phone yes lets say $500 "omg thats sooo expensive im not paying that for a phone" - silly customer and iami67 .. the plan is $60.. the phone is $15 a month sooo thats.....$75 a month and last i checked thats cheaper than every carrier but it makes sense that its too much math you should just pay 200 for the phone and 90 a month .. ohh btw when the phones paid off the bill is 60 again versus paying 90 continously lol enjoy

posted on 10 Mar 2012, 01:03

37. Forsaken77 (Posts: 553; Member since: 09 Jun 2011)

People in the US will NEVER pay full retail for a phone, period. Like someone else said... we'd be back to feature phones over night. I love my high-end phones, but I would never drop that much at once on a phone.

I also think carriers should charge your plan by the model phone you get. Not everyone should have to pay for Apples over priced ipod that can make calls. I bet if a good law firm brought a suit against the carriers for making every customer pay a high premium to subsidize the Apple products, they'd win. They're charging most people for a product they didn't even buy!!

posted on 18 May 2012, 07:31

41. -RVM- (Posts: 331; Member since: 19 Oct 2011)

Is it that bad in the US ? I live in Slovakia (with much lower average wage) and i have no problem to pay 550€ (already preoredered) for Nokia 808. Even my previous N8 cost me 440€.

posted on 26 Mar 2012, 05:08

39. iWallE (Posts: 48; Member since: 10 Oct 2011)

It's a difficult question. On one hand subsidies drive volume sales, hence phonemakers earn more money and invest more in making even better phones. This also means complicated high-end technology ends up in the hands of more people. On the other hand subsidies deform the market. People never realize the actual value of their phones and end up thinking a 200$ gadget should be able to do it all.
But the worst bit is the current model is anti-competitive. The full retail price of an iPhone is at least 150-250$ more than any high-end droid. But subsidies make the price equal, or even make the iPhone cheaper. This raises the expectations for Android devices and suddenly the iPhone becomes number one in terms of value for money. If subsidies were equal or at least proportional to the full price of smartphones, Apple would have to work much harder to justify a premium price tag.
I belive subsidies should be revised so that at least they don't affect the market competition so much. Otherwise, I don't mind carriers paying the price for the development of technology instead of the common user. As for being able to choose your phone separately from the carrier - this choice always remains. And this is how I bought 4 of my last 5 phones. But this is a choice very few people make when they have the option of a subsidized phone from the carrier they'll end up in contract with anyway.

posted on 26 Mar 2012, 16:52

40. panther_911 (Posts: 2; Member since: 26 Mar 2012)

Subsidies dont work, never have-never will. (welfare is a "subsidie", hows that working?)
If you eliminate subsidies, service providers will be able to compete better for "services", & not be concerned about the 'next best product', or warranty issues of some phone makers sloppy designs.
If you eliminate subsidies, phone makers will need to compete amongst themselves for product sales so not only will innovation increase, prices will decrease due to competition (no exclusive carrier aggreements), & all phones will be available across all carrier lines/freq..
Its a win/win for consumers...

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