One Small Step for Wireless Customers

By  |  Thursday, February 25, 2010 at 3:43 pm

I don’t like signing up for two-year contracts when I buy a phone–in fact, I’ve frequently chosen to buy phones at full price and therefore avoid the commitment. But there’s been one giant argument against doing so: Wireless carriers charge folks who pay up front for a phone exactly the same monthly fee that they get from customers who opt to get the phone cheap in return for signing a contract.

Effectively, full-price phone buyers are paying back the subsidy to the carrier even though they weren’t subsidized in the first place. That’s why I reluctantly but rationally signed up for a two-year Verizon contract last week when I bought a Droid. (The Droid only works on Verizon in the first place, so it’s not like I have the option of leaving the carrier a few months from now and using the handset with another carrier.)

Now T-Mobile has become the first U.S. carrier to do the right thing: As Bob Tedeschi of the New York Times reports, it’s charging people who pay list price for phones less for monthly service than it does subsidy customers. By forgoing the subsidy, you’ll save money over the long run and won’t be locked into a relationship with T-Mobile; assuming you’ve got the cash on hand, it clearly becomes the smartest way to buy a phone.

Bravo, T-Mobile. May AT&T, Sprint, and Verizon follow your lead…



11 Comments For This Post

  1. sfmitch Says:

    Until cell phones can be moved between networks – which is not happening anytime soon (maybe with LTE?) then this is a complete non-story, non- issue.

    So, super-smart T-Mobile consumer, where you going with that ‘freedom’ phone? Oh, Nowhere you say? You are a smart shopper!!!!! You really stuck it to the man!!!

  2. AJ Says:

    Some phones work on both AT&T and T-Mobile, so at least you can make one change of carriers. Also, the rate plan money saved is worth it, if you were to keep the carrier anyway.

  3. Bouke Timbermont Says:

    I never liked subsidized phones. In fact, bundling phones with contracts was made illegal in Belgium in the mid nineties, for the exact reason you state: the ‘subsidizing’ was in fact fake: telcos just overcharged customers that didn’t get a bundled model, making it seem that bundled phones were a lot cheaper.

    But now that law has been revoked, and I fear telcos, by far the best companies at overcharging customers, will do the same thing again: just blow up prices of unlocked phones to pretend they subsidize the locked ones…

  4. jltnol Says:

    I can only HOPE and PRAY that all other carriers follow suite.

    With most phones lasting 18 months on a 24 month contract, you can easily see how once you sign up, you can’t easily un-signup.

    I’d love the ability to purchase my phone, and pay less per month for service. That way, whenever I decided to buy a new phone… every year…. every 18 months(since that’s how long mine seem to last) or every two years, I buy it when I decide to buy it and don’t have to wait ’til the contract is up.

  5. Backlin Says:

    Finally, a carrier starts making some sense!

  6. Dissenter Says:

    I’m super happy with Boost Mobile. A full-featured CDMA Blackberry Curve for $60/mo UNLIMITED. No contracts.

  7. TishTash Says:

    sfmitch: If you can see anywhere past your supercilious arrogance, you would realize the key phrase here was “small step,” you smug sonuvabich.

  8. sfmitch Says:

    TishTash = assmuncher

  9. TishTash Says:

    Amazing: You topped (or bottomed, in keeping with your rectal obsession) even yourself. Tell me, did you (d)evolve your utter lack of literal creativity of your own volition, or did it spring from the utter lack of parental love and subsequent emotional neglect?

  10. sfmitch Says:

    I can’t decide if you know how big of a Tool you are or if you are so clueless that you have no idea…..

  11. TishTash Says:

    @sfmitch: Well, decisions are hard: Should you breathe? Should you crap? So much of your day spent on such ruminations!