What forces you guys into contracts for mobiles?

[Cristatus]

Why do you guys need to get a contract? What's the advantage for this? And so what if you've got a 2 year contract and need a new phone? You can go out and buy another unlocked phone.

Seriously though, it's not like you're getting some kind of discounts on the handsets (unlike in the UK where the handsets are heavily discounted if you get a contract).

So, then, what is the reason for getting in to a 2 year contract?

(C)

 

[pm]

I haven't signed a contract once since I realized that I didn't need to have one to have service. That was about 6 years ago.

 

[abaez]

Originally posted by: Cristatus
Why do you guys need to get a contract? What's the advantage for this? And so what if you've got a 2 year contract and need a new phone? You can go out and buy another unlocked phone.

Seriously though, it's not like you're getting some kind of discounts on the handsets (unlike in the UK where the handsets are heavily discounted if you get a contract).

So, then, what is the reason for getting in to a 2 year contract?

(C)

What are you talking about? Of course you get discounts, that's why you get a contract in the first place.

 

[Cristatus]

Originally posted by: abaez

Originally posted by: Cristatus
Why do you guys need to get a contract? What's the advantage for this? And so what if you've got a 2 year contract and need a new phone? You can go out and buy another unlocked phone.

Seriously though, it's not like you're getting some kind of discounts on the handsets (unlike in the UK where the handsets are heavily discounted if you get a contract).

So, then, what is the reason for getting in to a 2 year contract?

(C)

What are you talking about? Of course you get discounts, that's why you get a contract in the first place.

From what I've been hearing, contracts are pretty much pointless.

For example, the iPhone (I know, cliché, but it's cliché for a reason) sells for 199 USD there? What kind of contract do you need? 39.99 / month? So, after two years, you've paid 199 + (39.99 * 24) = 1158.

Now, if I got no contract, and I would be free to spend how much ever I want, because there's no minimum charge. That's effectively what this 39.99 / month charge is. They're banking on you not using all of the 39.99 USD's worth, and even if you do, and go over it, they're overcharging you per minute (probably moreso than the USD/minutes if you had no contract).
So, basically, let's say you spend an average of 25 USD / month. That would equal 600 USD for 24 months, and then you're free to use whatever handset at whatever price range you want. (Also, I really think the iPhone is worth only 200 USD, it's a shame that they sell for ~ 500 USD outside of the US).

(C)

 

[gorcorps]

Wow... you seem really fucking dense and have no idea how things work apparently. We get quite good discounts on phones with a 2 year contract for one, and god knows where you got the idea for the contrary. And I don't understand your iphone argument at all. With a contract you get it for $200, which is around 1/3 of the price to buy it retail w/ no contract. Then you added the cost of a plan to try and hint at the extra cost, but you have to pay for a plan either way so that doesn't change a fucking thing.

I've pretty much always been in contract because I got huge discounts on phones, and I'd be sticking with the company for at least 2 years anyway so what could it possibly hurt?

 

[Cristatus]

Originally posted by: gorcorps
Wow... you seem really fucking dense and have no idea how things work apparently. We get quite good discounts on phones with a 2 year contract for one, and god knows where you got the idea for the contrary. And I don't understand your iphone argument at all. With a contract you get it for $200, which is around 1/3 of the price to buy it retail w/ no contract. Then you added the cost of a plan to try and hint at the extra cost, but you have to pay for a plan either way so that doesn't change a fucking thing.

I've pretty much always been in contract because I got huge discounts on phones, and I'd be sticking with the company for at least 2 years anyway so what could it possibly hurt?

Wow, get pissy much?

Anyways, I tend to travel a lot, and usually use local SIMs at the different countries, so I guess the unlocked phones are a massive bonus for me. Plus travelling alot usually means that if I had a contract like you guys did, I would be paying for the minutes while I'm not using them. That's a bit silly, isn't it? That's why I didn't understand why you guys got into contracts alot.

Ok, I'll admit, the iPhone argument was a crap one, especially because of how Apple prices them differently if they're not with AT&T. I'm just trying to figure out another phone to compare to.

(C)

 

[erwos]

Cristatus: do you use data? Because, IMHO, that's where your argument falls apart. There just aren't a lot of pre-paid data plans in the US of A, and what we do have generally sucks.

 

[Spineshank]

Pre paid plans arent the same in the US as they are in Europe. I remember talking to a guy at a pub in Dublin about this. He said like 90% of people that have cell phones use prepaid and not a contract.

 

[BassBomb]

I use prepaid because I barely use my phone... If i used enough minutes / month I would go to contract

 

[corkyg]

The answer to the basic question, "What forces one to use a contract?" is basically money.

If you can afford to buy the phone or device outright upfront, with no subsidy, then a contract is easily avoided. If you require the carrier to subsidize or buy your phone for you, then a contract is needed to pay back what amounts to an up front loan.

 

[Pliablemoose]

I just re-upped with TMobile for 2 years, I've been with them for years, and when I'm due for a new subsidized phone, I get it, unlock it and sell it on eBay. I have a couple of Curve 8900's waiting for unlock codes from TMobile now...

 

[dainthomas]

Originally posted by: corkyg
The answer to the basic question, "What forces one to use a contract?" is basically money.

If you can afford to buy the phone or device outright upfront, with no subsidy, then a contract is easily avoided. If you require the carrier to subsidize or buy your phone for you, then a contract is needed to pay back what amounts to an up front loan.

If the price difference of a phone without a contract is greater than the carrier's ETF, then why not sign one? I'm not gonna pay $400 for an unlocked phone if someone will give it to me for $200 with a contract. Not sure about other carriers, but Sprint even prorates their ETFs after several months, so it's even less of an issue.

 

[Deeko]

Uhhh - lets see......

-You DO get much better deals on phones, what are you talking about?
-Prepaid is much more expensive per minute depending on how much you use the phone
-Prepaid generally has no data service

This isn't Europe, we can't just pretend our phone companies work like yours.

 

[KoolDrew]

Originally posted by: Deeko
Uhhh - lets see......

-You DO get much better deals on phones, what are you talking about?
-Prepaid is much more expensive per minute depending on how much you use the phone
-Prepaid generally has no data services

:thumbsup:

 

[Suspicious-Teach8788]

I thought plans around the world were more like you BRING in your own phone and you select a calling/data plan that suits you. No contracts, etc?

Phones in the US blow because of this whole stupid setup with carriers subsidizing phones and what not. It's also probably why reception is so terrible because a lot of money is spent on advertising for phones and for getting phones for cheap.

 

[Cristatus]

KoolDrew and Deeko: I'm not talking prepaid, I'm talking postpaid, but no contract. You just pay for what you use at the end of the month, and it's cheaper than a prepaid. Plus you get everything that you do with a contract, you just pick and choose. And it's a bring your own phone system like DLeRium mentioned.

I prefer that, because then I'm not paying for SMSs, or Data when I'm just using minutes.

(C)

 

[boomhower]

Sorry but not everyone here is a world traveler. You didn't make any mention of international travel in your OP and now are trying to base your argument off of it. How about not calling most of the forum stupid for signing a cell contract before researching the subject at all, then try and back out of it by going into international use when you obvious lack of knowledge of the subject reveals itself. If you want to basically call several thousand people stupid at least research the subject a bit.

Originally posted by: Cristatus
KoolDrew and Deeko: I'm not talking prepaid, I'm talking postpaid, but no contract. You just pay for what you use at the end of the month, and it's cheaper than a prepaid. Plus you get everything that you do with a contract, you just pick and choose. And it's a bring your own phone system like DLeRium mentioned.

I prefer that, because then I'm not paying for SMSs, or Data when I'm just using minutes.

(C)

Simple answer, is that to the best of my knowledge it doesn't exist. You pick what plan you want and that's what it is. Say 500 minutes for $40 a month. If you use 200 minutes its still $40 a month. Whether you signed a contract and got your phone for $200 or payed full retail of $600 doesn't matter, it is still $40 a month. By not signing a contract your actually costing yourself money(not counting people who barely use a phone where pre-paid actually makes more sense)

Then there is the data issue that has been brought up.

On top of that pre-paid over here sucks. Most services I have seen charge a daily use fee on top of the high per minute fee. The only people I know that have pre-paid either hardly ever use it to where it does make financial sense or have shitty credit and none of the big carriers will give them an account.

 

[shortylickens]

Originally posted by: Cristatus
Why do you guys need to get a contract? What's the advantage for this? And so what if you've got a 2 year contract and need a new phone? You can go out and buy another unlocked phone.

Seriously though, it's not like you're getting some kind of discounts on the handsets (unlike in the UK where the handsets are heavily discounted if you get a contract).

So, then, what is the reason for getting in to a 2 year contract?

Yes, you get a discount.
All these phones that we pay 100-200 dollars for are actually valued at 400-600.
The iPhone is a perfect example, not that I want it.

If you get a phone AND WANT TO USE IT, you will need some sort of a plan, prepaid or not. The only exception to this is 911 calls (999 for you). Those always go through if you are in range of any cell tower.

Yes, plans cost money. But you are always going to pay a little something for them, it makes sense to get the discount on a new phone at the same time. The only exception to this is if you are really partial to a certain service and they dont have a phone you love. Also it helps if you dont give a damn how much money you put out, you just gotta have that awesome phone.
Actually this is pretty common among the geeks here at Anandtech.


As for the pre-paid issue: Tracfone does not charge any special fees. You get 10 or 20 free minutes when you buy the thing, then you purchase card with airtime on them. You use them at your discretion, if at all. My mom has one with 600 or so units and she wont use them up in 6 years. Its OK, she wont take a penalty for not using them, she wont ever lose them. Its all good. Tracfone doesnt care because they already have their money. IF you talk more than 100 minutes a month most of the prepaid plans are a ripoff. Better to get a regular plan.

But as has already been pointed out, prepaid plans have no data or very expensive data. They gotta make their money somehow.

 

[TheWart]

I understand how the idea of a contract locking you in to X company for 2 years rubs people the wrong way, but for the life of me I cannot understand how people make the "well you are really paying contract price+50 month for the phone!!!?!?"

**you STILL HAVE TO PAY THE MONTHLY FEE if you buy an unlocked phone without a contract**

Why can't people get this through their heads?? The contract makes it CHEAPER because you are paying less up front. The only benefit to not having a contract, is that you can hop from carrier to carrier, which is great, especially if you travel. Now would I prefer to have an unlocked phone and no contract for the same price? Sure, but that isnt the case.

sigh, it is just that this argument gets trotted out every time and it defies logic.

 

[Pliablemoose]

Originally posted by: TheWart
I understand how the idea of a contract locking you in to X company for 2 years rubs people the wrong way, but for the life of me I cannot understand how people make the "well you are really paying contract price+50 month for the phone!!!?!?"

**you STILL HAVE TO PAY THE MONTHLY FEE if you buy an unlocked phone without a contract**

Why can't people get this through their heads?? The contract makes it CHEAPER because you are paying less up front. The only benefit to not having a contract, is that you can hop from carrier to carrier, which is great, especially if you travel. Now would I prefer to have an unlocked phone and no contract for the same price? Sure, but that isnt the case.

sigh, it is just that this argument gets trotted out every time and it defies logic.

Exactly, it's the same cost month to month with or without a contract, and if you play your cards right, the subsidized phones are a great deal.

 

[secretanchitman]

phone is cheaper that way. also i have no problem being in contract, especially because i have a very good plan at a very cheap price ($30 for sprint sero). however, otherwise i would be hesitant to be in contract for any other carrier.

 

[pm]

Originally posted by: Pliablemoose
Exactly, it's the same cost month to month with or without a contract, and if you play your cards right, the subsidized phones are a great deal.

I haven't found this to be true all the time, particularly for the low-end plans. The main reason that I haven't signed a contract is that I had a plan that was not current for years. We got it 6 years ago, it was super-cheap at the time, and I continued to get grandfathered with it year after year. If I had re-up'd with a contract, I'd get a discount on a new phone, but they wanted me to bump up to the current deals... which were $20 more a month than we were paying. All this was a few months ago, now my wife and I are moving to Europe for 6 months. She's already left, so we changed everything around. So it's even better that we are contractless because it gives us flexibility in this whole thing.

But back to my point, if you have an old plan that's cheap, it's been my experience that you can hold onto it as long as you can avoid signing a new contract.

 

[Spicedaddy]

Free phones that sell for 300-400$ unlocked, and a better plan usually. Of course you can keep that plan once the contract expires, but my cell provider (Rogers) usually offers me a better one if I sign another contract.

I'm happy with my provider and I know I won't change or cancel, so why not sign a contract?

 

[Deeko]

Originally posted by: Cristatus
KoolDrew and Deeko: I'm not talking prepaid, I'm talking postpaid, but no contract. You just pay for what you use at the end of the month, and it's cheaper than a prepaid. Plus you get everything that you do with a contract, you just pick and choose. And it's a bring your own phone system like DLeRium mentioned.

I prefer that, because then I'm not paying for SMSs, or Data when I'm just using minutes.

(C)

We have nothing even remotely close to that here. So that is your answer. We don't do that because carriers don't offer it.

 

[WelshBloke]

Originally posted by: TheWart
I understand how the idea of a contract locking you in to X company for 2 years rubs people the wrong way, but for the life of me I cannot understand how people make the "well you are really paying contract price+50 month for the phone!!!?!?"

**you STILL HAVE TO PAY THE MONTHLY FEE if you buy an unlocked phone without a contract**

Why can't people get this through their heads?? The contract makes it CHEAPER because you are paying less up front. The only benefit to not having a contract, is that you can hop from carrier to carrier, which is great, especially if you travel. Now would I prefer to have an unlocked phone and no contract for the same price? Sure, but that isnt the case.

sigh, it is just that this argument gets trotted out every time and it defies logic.

Wat? No contract=no monthly fee.