Have own phone = paying too much

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Have own phone = paying too much

Postposted on Wed Mar 23, 2011 6:16 am

Here's something i've been mulling over. If i have my own phone, why do i pay the same rates as somebody who's getting a phone subsidized? that makes no sense to me. how can the carrier justify charging me the same amount, when they don't have to put up the initial cost.

Take for example, in canada, a LG optimus 7, is a 500$ phone, with no contract. With telus, the lowest smartphone plan you can get is 50$ a month , that's 300 local minutes, and 500mb, btw FOR 50$?!?!?! That's 10 months worth of fees, and yet, I have to pay the same amount as somebody who gets the phone up front, at no charge?!

How is this legal? who lets them make these plans? there should be laws!
Last edited by sweatshopking on Wed Mar 19, 2014 9:02 am, edited 2 times in total.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 6:26 am

I hear what you're saying brother- unfortunately, the answer is to always upgrade within your network (or switch networks) while buying a subsidized phone. You have to buy the phones they want you too, but you give them less money for what you get.

I'm assuming you're a neighbor to the north, but I think the result is the same. My advice is to pick a handset that either suits your needs or can be modified to do so (I'm looking at you, Android), from your carrier of choice, even if it means waiting to get the latest and greatest.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 6:48 am

sweatshopking wrote:Here's something i've been mulling over. If i have my own phone, why do i pay the same rates as somebody who's getting a phone subsidized? that makes no sense to me. how can the carrier justify charging me the same amount, when they don't have to put up the initial cost.

Take for example, in canada, a LG optimus 7, is a 500$ phone, with no contract. With telus, the lowest smartphone plan you can get is 50$ a month , that's 300 local minutes, and 500mb, btw FOR 50$?!?!?! That's 10 months worth of fees, and yet, I have to pay the same amount as somebody who gets the phone up front, at no charge?!

How is this legal? who lets them make these plans? there should be laws!

You have no contract. You're free to leave. Apparently you have decided your current situation is the most competitive option for you.

You could try to negotiate. YMMV. Another option is to choose a different carrier. If there isn't a better value available, you are apparently paying the market price.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:00 am

there is no negotiation. and there is no alternative. bell is the same price. roger's is the same price. no choice, but to take it up the ass. that's not "market price", it's collusion and should be illegal. I just purchased a optimus 7 for 100$, which is locked to telus, at this point. I'm thinkin about unlocking it, which isn't that hard, but there is nobody else to take it to. This crap blows.

I should say, i absolutely didn't want a contract, so buying my own phone was necessary. I only want to use the phone a few months in the year, so paying for 3 years didn't make sense.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:02 am

mattsteg wrote:You have no contract. You're free to leave. Apparently you have decided your current situation is the most competitive option for you.

You could try to negotiate. YMMV. Another option is to choose a different carrier. If there isn't a better value available, you are apparently paying the market price.


Good summary from a different perspective-

Assuming he doesn't have a contract, I guess that portability would be a value to him in place of being locked down for two years, but getting subsidized handsets. Also, if you aren't on a contract, you can just stop service. So there is value with a contract, and value without a contract. The difference of the value is up to you!

For me, I know that I need a phone, and I know I'm not rich, so getting a contract with a subsidized phone makes sense.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:04 am

mattsteg wrote:
sweatshopking wrote:... How is this legal? who lets them make these plans? there should be laws!

You have no contract. You're free to leave. Apparently you have decided your current situation is the most competitive option for you.

Bingo. When you use their phone, they're basically subsidizing the cost of the phone in exchange for you committing to a long-term contract.

If it was made illegal, then everyone would need to pay the full cost of their phones up front. How is that an improvement?
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:05 am

but what portability do you actually have, when the companies only sell locked phones? I could see there being an argument made if they were unlocked, and therefor could travel, but they're not.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:07 am

just brew it! wrote:
mattsteg wrote:
sweatshopking wrote:... How is this legal? who lets them make these plans? there should be laws!

You have no contract. You're free to leave. Apparently you have decided your current situation is the most competitive option for you.

Bingo. When you use their phone, they're basically subsidizing the cost of the phone in exchange for you committing to a long-term contract.

If it was made illegal, then everyone would need to pay the full cost of their phones up front. How is that an improvement?


I'm not saying that. I'm saying there should be 2 prices.
1. for subsidized phones, with the price of the phone being amortized over the length of the contract, and
2. for people with phones, who shouldn't need to pay for a phone they didn't get.

I'm not in a contract. I'm not asking them to subsidize anything. why am i paying the same rates as a guy who is? that's like paying the same rates on a house, when i have a down payment, and the other guy doesn't.

Edit: actually, I think the economy in general would benefit if people weren't locked into contracts. How many people do you know who are stuck with a contract, can't afford it, and end up getting F'd because of it. my mother in law got laid off, and has a rogers bill that destroyed her credit. sure it's her "fault", she had no way of knowing she'd get laid off in the great recession, when she took the contract years earlier, but c'est la vie. I do think, that if you can't afford to pay full price for something like a cell, you probably shouldn't have one. that's an opinion, and such things are hard to legislate, and still, there are exceptions, so such things shouldn't be legislated. but i don't think the current situation makes any sense.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:09 am

sweatshopking wrote:but what portability do you actually have, when the companies only sell locked phones? I could see there being an argument made if they were unlocked, and therefor could travel, but they're not.


Portability of service- you can stop your service at your discretion. The phone is whatever the company decides to sell; besides, if you're on a contract with a locked phone, what does it matter? An unlocked phone is portable between services along with it's associated service account, and a locked phone is available with a contract. Seems right to me.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:14 am

Airmantharp wrote:
sweatshopking wrote:but what portability do you actually have, when the companies only sell locked phones? I could see there being an argument made if they were unlocked, and therefor could travel, but they're not.


Portability of service- you can stop your service at your discretion. The phone is whatever the company decides to sell; besides, if you're on a contract with a locked phone, what does it matter? An unlocked phone is portable between services along with it's associated service account, and a locked phone is available with a contract. Seems right to me.


I can stop, but i can't port it to anywhere. that's not portability, that just means I don't have a contract.

A phone that is sold, not on a contract is not unlocked. it's still locked, it's just not on a contract. how does that seem right to you? I pay full price for a phone, cannot use it how/where I want, and that's fine? yet, when apple locks things at ALL, people lose their minds! why do carriers get away with it? IMC, it's not a huge deal, windows phone 7 is currently not that hard to unlock. you just enter the registry, and set it to developer mode. BUT, that might/have change(d). IDK. My point is that they're removing my ability to use my own product, and limiting my choices.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:15 am

Without subsidized phones, fewer people would have phones. Period. I can see so many obvious negatives to this that I'm not going to bother with examples.

What might solve your problem, however, would be the option of a lower priced, non-subsidized contract- you lose carrier portability but get move your phone to wherever when your contract is up.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:16 am

Do you not have unlocked phones available to you? I know that I can get them, but they do cost more than the subsidized phones.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:18 am

I think if we had 2 choices,

1. buy a phone outright, and pay less month to month,
2. get a subsidized phone, and pay a little more month to month,

people would be able to make their own decisions, and pick what works best for them.
I also think that carriers would benefit, as they wouldn't have to worry about losing customers, or losing money on subsidized phones, like they do now. since the At&t merger, sprint has been saying phone subsidies are going to have to increase, and it's going to hurt bottom lines. Why? why no let people choose if they want that, fine, if not, pay full price. I also think it might impact phone sales, as people will likely continue with older phones, which means less E-waste. yay!
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:19 am

Airmantharp wrote:Do you not have unlocked phones available to you? I know that I can get them, but they do cost more than the subsidized phones.

Correct. the only place to get an unlocked phone in this country is through something like newegg. phones not on contract are IDENTICAL to the ones on contract, you're just not on contract.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:23 am

Airmantharp wrote:Without subsidized phones, fewer people would have phones. Period. I can see so many obvious negatives to this that I'm not going to bother with examples.

What might solve your problem, however, would be the option of a lower priced, non-subsidized contract- you lose carrier portability but get move your phone to wherever when your contract is up.


i don't think you understand what i'm saying. I ALREADY have a phone. I'm not going to have a contract AT ALL. i'll be paying month to month, and cancel at any point. I can't however, pick a carrier for the phone that I currently have, as it's locked to telus. I also have to pay the same amount, as somebody who just got a brand new phone subsidized by the carrier, when I didn't just get a brand new phone subsidized by the carrier, and this is the part that's got me annoyed.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:27 am

Well, you're talking about two things here- your situation, and the rules that have allowed for it, and I've been focusing on the rules.

You decided to buy a subsidized phone locked to a carrier, and not an unlocked phone, which is surely available. Now that you've paid your contract, you don't want to pay the price for subsidization. I've actually answered this question; it's time to get a new subsidized phone, so that you can realize the full value of your service. Way the world works.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:32 am

Hum ... if you have a long term contract then why the hell would u need to lock the phone? In my country (Lithuania, East EU) Carriers no longer bother with that. Got my galaxy S but since I migrated carriers and wanted to use my old number I had to wait about a week. No problem - used old cariers sim for a week then switched to a new sim.
U are still obliged to pay for for your usually more expensive plan for 2 yrs, so I see no point in locking the phone.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:34 am

Actually, it's the way the US and Canada work. In Europe, different subsidized phones have different plan prices, unlocked phones are common, and those plans are the cheapest.

(And, you can always unlock the phone. Or, if that's illegal in Canada, ship it here to the US, have someone unlock it for you (perfectly legal due to a DMCA exemption), and then ship it back to you.)
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:39 am

Airmantharp wrote:Well, you're talking about two things here- your situation, and the rules that have allowed for it, and I've been focusing on the rules.

You decided to buy a subsidized phone locked to a carrier, and not an unlocked phone, which is surely available. Now that you've paid your contract, you don't want to pay the price for subsidization. I've actually answered this question; it's time to get a new subsidized phone, so that you can realize the full value of your service. Way the world works.


No carrier in canada sells unlocked phones. None. you CAN order them online, but they come form other places. I've worked for telus, and bell. NO CARRIER IN CANADA SELLS UNLOCKED PHONES. Not really available.

I bought a phone from a buddy, who purchased this phone for 500$ with NO CONTRACT from telus. this is the only way to get a phone not on a contract from a "dealer" in canada. Full price for this device. then, his father passed away, and he ended up with his iphone 4, so he switched the iphone onto his plan, and sold me the optimus 7.

I'm not sure how to communicate this any better. You guys are such market junkies around here, how come this seems so strange to you?

I do not want a contract at all. I have a phone that was purchased at full market price, on no contract. because i'm in canada, this is really my only option TO AVOID A CONTRACT. this phone was not EVER sold at a subsidized price. it IS HOWEVER, LOCKED TO A CARRIER, DESPITE NOT EVER BEING SUBSIDIZED. That i can fix though.


we can legally unlock, it's just usually quite hard. it doesn't matter too much either, as bell and telus share towers, and have identical pricing, and both share the same garbage support. it literally makes no difference who you choose. it won't effect your signal, or bill.
I DO NOT WANT A NEW PHONE EITHER. the optimus 7 is a new phone. why would i want a new one? it's the exact phone i want. I love windows phone 7.

as for the way the world works, that's not how it works. thats how it works here. I want a hybrid NA/european system. where, if you have your own phone, pay less. if you need a phone, pay more.

I don't understand what's confusing about this.

I'm paying more for absolutely no gain. same service, same towers, same data, same price, but the company DOES NOT HAVE TO GIVE ME A PHONE, SAVING THEM HUNDREDS OF DOLLARS. how does that make sense to you? why doesn't the market allow for more choice? well, i know why, cause they have a oligopoly, but it SHOULD Be there.

please excuse the caps, i'm not trying to be rude, just need it it for emphasis :)
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:44 am

sweatshopking wrote:I'm not saying that. I'm saying there should be 2 prices.
1. for subsidized phones, with the price of the phone being amortized over the length of the contract, and
2. for people with phones, who shouldn't need to pay for a phone they didn't get.


In other words, you're saying that the fact that consumers are locked into a two year contract has no instrinsic value to the wireless carrier. That is, the purpose behind the idea is not to sell you their product, but rather to finance your cellphone. That the value provided to the carrier by a customer is the same with a contract or without.

This is, of course, wrong. The value is not the same. A guaranteed two year contract does have greater value to the wireless carrier. This is why consumers can usually get discounts for long-term contracts.

Thus the question is not "why can't I get a better month-to-month price with my own cellphone?" The question is why you can't get a lower-priced two-year contract with your own cellphone.

sweatshopking wrote:I'm not in a contract. I'm not asking them to subsidize anything. why am i paying the same rates as a guy who is? that's like paying the same rates on a house, when i have a down payment, and the other guy doesn't.


You've got it backwards. Generally, people with a contract get a lower price than those without a contract. So, instead of asking why people without a contract don't pay a lower price, you should be asking why people with a contract aren't. The answer is because the cost of the bundled cellphone brings them back up to the regular price.

In other words, the cellphone offsets the inherent discount of a two year contract. There is no inherent discount for having your own phone with no contract.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:49 am

sweatshopking wrote:I'm not sure how to communicate this any better. You guys are such market junkies around here, how come this seems so strange to you?


You can't communicate it better. We already know you're wrong and why.

sweatshopking wrote:I do not want a contract at all.


But yet you expect to get the benefits of one anyway. Strange.

Reality can be frustrating, but it's never going to learn or change. That's entirely up to you.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:55 am

Glorious wrote:
sweatshopking wrote:I'm not sure how to communicate this any better. You guys are such market junkies around here, how come this seems so strange to you?


You can't communicate it better. We already know you're wrong and why.

sweatshopking wrote:I do not want a contract at all.


But yet you expect to get the benefits of one anyway. Strange.

Reality can be frustrating, but it's never going to learn or change. That's entirely up to you.


What are you talking about?
Of course the contract has intrinsic value. I never said otherwise. My coming on, paying them 50$ for 6 months, with not cost to them for ANYTHING other than providing the service, WHICH THEY MAKE MONEY ON, is money in their pocket. THEY HAVE NO ADDITIONAL EXPENDITURES.
The point in a contract is to ensure that they make as much money for as long as possible, and to ensure that they MAKE THE MONEY BACK THAT THEY INVESTED WHEN GIVING ME A PHONE.

You 're correct in how the current system works. but that doesn't make it right, just how it is. Once again you fail to make the distinction between how things currently are, and how they should be. You really seem to struggle with this. I don't know if you're able to actually THINK about something, rather than just being locked in this moment.

I'm not asking them for any investment, I'm asking why i need to pay the same rates as somebody who did get an investment. Tell you what, let's call your investor, and he can start paying me, even though I never gave him a penny. it's the same thing. THEY ARE GIVING NOTHING, AND CHARGING ME THE SAME AMOUNT, AS IF THEY HAD INVESTED IN MY BUSINESS. WHICH THEY HAVE NOT.

Sorry Glorious, your logic is wrong, and your snide attitude continues to make you look like an arrogant ass. just so you know, glorious, i'm tired of your obnoxious posts, and you've been foe'd. any reply you make, won't be viewed myself.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 7:59 am

I'm not lost on where you're coming from, and Glorious spelled it out very well (thanks).

Again, carriers don't have to sell unlocked phones- and the lack of competition in North America largely means that they don't. If you want to quip about that, and why Europeans seem to have it better, the difference can be seen in one simple factor: population density. We're less dense, which makes equivalent coverage more expensive and more difficult every way you look at it; you pay a price for all of the extra room we have here!

Further, you admit that unlocked phones are available. Think about it; this would have been your best option, considering your aversion to contracts, however you chose to buy a locked phone from a friend instead of buying an unlocked phone, and you chose to buy an unlocked phone when you knew that there was no benefit to doing so over buying a subsidized phone, which was also available. Essentially, you have given up the value of subsidizing your phone in order to purchase a phone from a friend instead of from a carrier. I hope he appreciates it!
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:10 am

Airmantharp wrote:I'm not lost on where you're coming from, and Glorious spelled it out very well (thanks).

Again, carriers don't have to sell unlocked phones- and the lack of competition in North America largely means that they don't. If you want to quip about that, and why Europeans seem to have it better, the difference can be seen in one simple factor: population density. We're less dense, which makes equivalent coverage more expensive and more difficult every way you look at it; you pay a price for all of the extra room we have here!

Further, you admit that unlocked phones are available. Think about it; this would have been your best option, considering your aversion to contracts, however you chose to buy a locked phone from a friend instead of buying an unlocked phone, and you chose to buy an unlocked phone when you knew that there was no benefit to doing so over buying a subsidized phone, which was also available. Essentially, you have given up the value of subsidizing your phone in order to purchase a phone from a friend instead of from a carrier. I hope he appreciates it!


of course there are benefits to buying a phone from a friend vs from a carrier. for one thing, it's 400$ cheaper. if I get a 'free' phone from a carrier, i need a 3 year contract. If i use my own phone, i have no contract. Unlocked phones are NOT available, except through things like newegg, but like I previously said, offer no benefit, as the carriers are IDENTICAL.

I have "given up the value of a subsidized phone", but it makes no sense for that to be the case. They provide no additional service/investment, and make the same monthly return.

Anyway, i'm taking my son for a walk, i'll be back in a few hours, we can continue to argue then ;)
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:28 am

Dont use a cell phone. Its that simple. I know many people who dont use them and live well.

The other alternative is buy a pay as you go phone. THAT is the cheapest way to own a cell.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:31 am

SSK wrote:What are you talking about?


Economics?

SSK wrote:Of course the contract has intrinsic value.


If this is truthfully as obvious to you as it to me, why are you surprised that you can't get a lower price for not having a contract?

And why do you completely contradict this within sentences?

SSK wrote: I never said otherwise.


Maybe not, but your argument not only implies it but actually relies on it as well.

SSK wrote:My coming on, paying them 50$ for 6 months, with not cost to them for ANYTHING other than providing the service, WHICH THEY MAKE MONEY ON, is money in their pocket. THEY HAVE NO EXPENDITURES.


Nonsense. The marginal cost of adding you as a customer is indeed minimal, but they have expenditures well into the billions. Of this I, and whatever financial statements Canada requires of them, assure you.

SSK wrote:The point in a contract is to ensure that they make as much money for as long as possible


The point of the contract is to retain you as a customer and thus provide greater certainty to their revenue stream.

SSK wrote:and to ensure that they MAKE THE MONEY BACK THAT THEY INVESTED WHEN GIVING ME A PHONE.


Which is, clearly, the extrinsic value of the contract. They are not a cellphone-financing company. They are a wireless carrier.

SSK wrote:Your correct in how the current system works. but that doesn't make it right, just how it is.


It indeed is "not right" that we do not live in a lollipop forest inhabited with elves whose melodiously-chanted song can lift the melancholy from even the most sorrowful of souls.

SSK wrote:Once again you fail to make the distinction between how things currently are, and how they should be


I make a distinction between how things currently are and how they can be, which is meaningful and useful. Without it, Rogers "should" be paying you 10k a day for the sublime pleasure of having you as a customer. Clearly, "should" is meaningless and non-useful.

That fact that you specify a number less than 10k a day, or indeed even admit that you should pay them something, only appears to make your argument reasonable. But the crux of the problem is the same: you desire something, and thus you feel it should be real. Moderating that desire to make it less outrageous in degree makes it no less outrageous in principle.

SSK wrote:I'm not asking them for any investment, I'm asking why i need to pay the same rates as somebody who did get an investment. Tell you what, let's call your investor, and he can start paying me, even though I never gave him a penny. it's the same thing. THEY ARE GIVING NOTHING, AND CHARGING ME THE SAME AMOUNT, AS IF THEY HAD INVESTED IN MY BUSINESS. WHICH THEY HAVE NOT.


Again, a contracted consumer gives the carrier something of additional value in the contract. In return, the carrier offers a phone. The result is the regular price.

A non-contracted consumer gives the carrier nothing of additional value, and so pays the regular price.

SSK wrote:Sorry Glorious, your logic is wrong, and your snide attitude continues to make you look like an arrogant ass. just so you know, glorious, i'm tired of your obnoxious posts, and you've been foed. any reply you make, won't be viewed myself.


They'll just be viewed by everyone else, which is all I was aiming for anyway.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:32 am

except you can't pay as you go on a smartphone, otherwise i'd be all over that. I haven't had a cell for YEARS, but with my wife working now, and being on the road a lot, we'd like to have one.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:33 am

sweatshopking wrote:
just brew it! wrote:If it was made illegal, then everyone would need to pay the full cost of their phones up front. How is that an improvement?

I'm not saying that. I'm saying there should be 2 prices.
1. for subsidized phones, with the price of the phone being amortized over the length of the contract, and
2. for people with phones, who shouldn't need to pay for a phone they didn't get.

Look at it from the other angle: The people who fall into category 1 are essentially getting a monthly discount (the phone subsidy) in exchange for being locked in to the same provider; you are forgoing this "discount" in exchange for the ability to leave whenever you want. The guaranteed revenue stream (and the administrative cost savings from not having people switching carriers every few months) is important enough to the providers that they are willing to subsidize the phone in exchange for contract lock-in.

There's nothing nefarious going on here; it is just basic economics.

Edit: Assuming you provide your own phone, would you be willing to be locked into a contract in exchange for paying a lower monthly rate? That would level the playing field, and be the most fair to everyone.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:44 am

JBI wrote:Would you be willing to pay a lower rate in exchange for being locked in to a contract? That would level the playing field, and be the most "fair" to everyone.


Yes! That is the relevant question here. If he can't do that, then he'd have a much more reasonable complaint.

But, of course, one can easily imagine how legal and practical difficulties could preclude such a option.
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Re: Why do i get raped if i have my own phone?

Postposted on Wed Mar 23, 2011 8:48 am

Glorious wrote:
JBI wrote:Would you be willing to pay a lower rate in exchange for being locked in to a contract? That would level the playing field, and be the most "fair" to everyone.

Yes! That is the relevant question here. If he can't do that, then he'd have a much more reasonable complaint.

But, of course, one can easily imagine how legal and practical difficulties could preclude such a option.

Doesn't seem that difficult to me; how is it significantly more difficult than the current system?

BTW I edited my edit for clarity after you quoted it... you must've hit "Reply" just as I was submitting the second edit...
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