Slashdot Mirror
T-Mobile Exec Calls For End To Cell Phone Subsidies
MojoKid writes "T-Mobile's Chief Marketing Officer Cole Brodman has an interesting idea for revamping the mobile industry, and it involves killing the subsidy plans that have driven smartphone adoption over the past five years. Asked what one thing he'd change if he had the power to do so, Brodman pointed to subsidy programs. 'It [device subsidies] actually distorts what devices actually cost and it causes OEMs, carriers — everybody to compete on different playing fields ...' Brodman isn't kidding about an irregular playing field. The HTC Titan is the most subsidized device in the chart seen here (unsubsidized at $549, $0.01 on contract). Microsoft is obviously desperate to gain market share in mobile but both the iPhone 4S and the Galaxy Note carry $400+ discounts too. The cheapest smartphone AT&T offers without a subsidy is the thoroughly mediocre HTC Status, for $349. To add insult to injury, it's only available in mauve. It's an interesting idea, but practically unworkable as far as the mass market is concerned. Carriers have built a market structure in which consumers gladly accept a new bauble every 18 months in exchange for paying for text messaging (which literally costs carriers nothing) and overage charges in which 300MB of data for $20 is a fair market value."
Don't know why you'd give particularly extra credit to Apple, gTalk, AIM, skype, et al already give people little incentive to consider anything particularly extra for SMS. I fail to see what 'iMessage' gives that these do not. SMS use in the face of all those is generally amongst people who aren't about to change their ways, most of who now have plans where messaging really doesn't impact them one way or another (for example I don't use SMS yet I couldn't get a plan with the features I wanted without unlimited SMS).
XML is like violence. If it doesn't solve the problem, use more.
Here's how it works here in Finland:
You either
a) buy the phone yourself (HTC Titan is ~590 EUR ~= 773 USD), and then have a plan without a phone. Example plans:
0.66e / month, 0.066e / min, 0.066e / sms
3.90e / month, includes 3000min in-network calls, others 0.069e/min, 0.069e/sms
38.90e / month, 3000 min to all networks, 3000 sms messages.
Unlimited non-NATted incoming-ports-open mobile broadband (HSPA+, max 15Mbps) is 13.90e / month (other speed classes exist), or 20.85e / month total for an extra SIM card ("MultiSIM") + USB modem (i.e. you get unlimited broadband in both your phone and computer for that price).
These contract are normally non-fixed-term, so you can cancel/switch operators anytime. Note that in Finland only outgoing calls are paid by the mobile user, incoming calls are paid by the caller (mobile numbers have a separate number block).
or b) buy a plan with a phone. This is a bit different from the US subsidies in that you pay *nothing* up-front, and the plans are actually the same as in (a) above, but there is an additional separate monthly cost for the phone. However, the "subsidy" is very small, only a few percents (e.g. HTC Titan total additional cost is 576 EUR, just 2.5% below normal market price). These are generally 2 year contracts. AFAIK these kind of bundling contracts are generally not allowed, but a special time-limited law was enacted in 2006 allowing such contracts to be made for 3G phones only, and it has been extended at least once since.
The prices above are for Saunalahti, but other carriers have very similar pricing and plans.
At least my impression from all this is that we seem to pay more for the phones, but our plans are otherwise way cheaper (when compared to the US)...
You DO know iMessage is just XMPP, right?
-- I'm the root of all that's evil, but you can call me cookie..
On T-mobile it is. I paid $400 for my phone and am saving $200 over the life of the contract. And yes, I did factor the up-front cost of the phone into the calculation.
iMessage gives you ease of use - I don't have to care whether the person I am messaging has iMessage or not, the messaging app works it out for me without any input from me at all on the matter. This way, I don't have to treat one block of contacts different to any other, it just happens.
Buy a prepaid phone. The up front cost of the phone is more expensive, but the service plans are cheaper. Also, no contract. There are even decent Android phone available on prepaid providers, for example, the Motorola Triumph on Virgin Mobile or LG Optimus Q on Straight Talk.
T-Mobile gives a 10 dollar discount on you plan if you bring your own device. There is also a carrier you don't usually hear about called MetroPCS that only does unsubsidized phones and their plans are much cheaper than the other carriers.
The soylentnews experiment has been a dismal failure.
Wow, and here in France for $27/month we get unlimited voice, unlimited text and 3Gb of data. And you can stop whenever you want without cost. You guys are really getting fucked sideways.
OG.
iMessage hides it from you. You just text somebody, and if they have an iPhone the text gets sent using cheap data instead of expensive SMS. The only distinction is what colour background the text has. Apple instantly made a chunk of carrier text revenue disappear without any effort on the part of the user: no getting your friends to sign up, no downloading an app, no remembering who has Skype accounts and who doesn't.
Blackberry figured out the built-in, just-like-texting thing first, but BBM used silly PIN numbers and didn't fail over to regular texts.
No. Transparent failover to SMS and using phone numbers as IDs are what set it apart. The user has to do NOTHING to use it. ANY other IM program at least requires you to get your friends to sign up. The point is that there's no marketing necessary. If you've got an i-device you use it automatically, transparently. If you were colour blind your first indication would probably be that your phone bill was smaller.
That's not what happens at all. If an iPhone user sends you a message, the iPhone checks with Apple's server. If the recipient's number is registered as an iOS device it gets transmitted as an iMessage. If not, it gets sent as a plain old text message.
If you're getting unreadable multimedia files from iPhone users it's likely that it's a contact card (VCF) attachment or map data.
I literally think you don't know how texting works.
Very simplified,
It utilises a frequency that the phone uses communicates with the tower, telling it that it is there. If no text messages are sent, the phone would still send out 140 characters of gibberish.
No extra cost.
IE, Nothing.
SIM-only contracts in the UK are somewhat cheaper than ones that include a handset subsidy (between half and two thirds).
Then again, it seems like the US is a special case; apparently no-one else screws one over quite as hard as an American mobile phone company.
If God forks the Universe every time you roll a die, he'd better have a damned good memory.
T-Mo is doing that. Their $30/mo prepaid plan is pretty sweet. 100 minutes, unlimited text, unlimited data. The only catch is the first 5GB is at 4G speeds. After that, you may be throttled to EDGE. So there's only 100 minutes... who needs minutes with an android + free calls with Google voice?
As far as I'm concerned, it's the best thing to happen to the price of internet access since AOL's $19.95/mo flat rate.
Did you include the forgone interest that could've been earned on the difference in principal between paying up front and paying over time less the amount of the increased monthly payments for the subsidized option over the life of the contract?
At the moment interest rates for saving accounts (in the US) are nearly non-existent. If you could find a 2-year CD that will allow a $200 minimum you're only looking at an interest rate of between .5% and 1.5% (if that high). The interest probably isn't worth the time or effort to buy the CD. There may be other investment vehicles that might pay a higher rate, but a $200 investment isn't going to open many interest-bearing opportunities.
T-Mobile is the single company doing this unilaterally.
They're the only American major carrier to offer cheaper plans if you bring your own phone.
Their most impressive cheaper plan for those of us that don't do a lot of talking on our smartphones anymore is an impressive attempt to bring European-style bring-your-own-smartphone plans to America. $30 a month, no additional taxes or fees, no contract for 5GB of HSPA+ 4G, unlimited 2G, unlimited text, and 100 minutes. That's not many minutes, but you can go pretty heavily over on minutes and still have it be a great deal. It doesn't take a long time on $30/month for your smartphone to start saving over a traditional American carrier smartphone plan.
If you assume 5% interest on $400 for 2 years, that's going to be only $441 after 2 years.
That's still a decent savings.
There are many stable and well paying dividend stocks that return in the 3-5% range consistently over a 3-5 year period with minimal risk to principal (albeit with little or very modest growth potential). Electric utilities, big tobacco and blue chip consumer staples are the canonical examples in this category. An investment of $200 would be enough for at least a handful of common shares in these sorts of companies.