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Sprint Drops Two-Year Contracts
An anonymous reader writes: Following the recent news that Verizon has ended smartphone subsidies, now Sprint has announced it is ending two-year contracts as well. This leaves AT&T as the last of the major carriers to offer such a plan. Most consumers will now have to get used to paying full price for their phones, though Sprint is also running a phone-leasing plan that lets people pay an additional $22/month for an 16GB iPhone, with yearly upgrades.
I must be missing something, but why do this? Offer monthly BYO plans and offer 2 year subsidised phone plans. These are two different market segments and I would have thought locking someone in on a 2 year contract would have been a good thing.
Boost Mobile. 10 GB/month of data, unlimited text/talk and when the data gives out, it just slows you down rather than stop you. All for 45 bucks a month. Fuck Sprint, Verizon, et al.
Back around 2000 Sprint (then SprintPCS) had no contracts at all, but indeed the costs of the phones were higher than their competitors at the time iirc. It was one of the things that I liked the best about SprintPCS at that time, and though I've mostly stuck with them over the years (all the companies rip you off, it's just a matter of how they pluck your goose), I'm glad to see that we'll be getting back to having the option of a higher capital expense with lower monthlies as a result.
Contracts are a ripoff. Show some responsibility and restraint, save money if you want a new phone every 2 years.
BeauHD. Worst editor since kdawson.
This effectively raises prices. Before, you could get your $700 iPhone for $200, and over the course of 2 years, you'd pay the subsidy off.
So without considering the cost of money, and to keep this simple, it's effectively $500 subsidy/ 24 months or about $21/month.
But here's where people stop thinking. You weren't actually paying for the phone, the phone company was. Because at the end of 24 months, you're still paying the same monthly rate, and you now own the phone. In the case of an iPhone, the value has historically worked about to be about $150-200 which you can sell yourself and get a new phone for $200.
Now think of this way. Now you get no subsidy on the phone, and they didn't lower their monthly bill by $21. So what Verizon, Spring, and T-Mobile did was effectively raise their monthly rates because you get no more subsidy, and the monthly cost of the plan is the same as it was before.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
This scam helped phone prices to stay absurdly high and earn ridiculous profits.
Let's hope this destroys phone prices.
If you compare the rates on the consumer plans to the business plans you can see how much fat is in the consumer price tag.
This is why I hate business pricing. Its basically prices for idiots versus prices for people without their heads up their asses.
If I needed a bunch of phones, I'd say I was a business if I needed the business pricing.
Watching the cellphone industry draw down prices quarter after quarter is hilarious. No sale.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
With the continuing devaluation of yuan, not only can far fewer people afford to buy iPhones in China, but now also Americans will be exposed to the true cost of iPhones. I bet quite many will opt for cheaper Android phones and iPhone US and China market shares will shrink at ever increasing pace..
Sprint was the #3 carrier in the nation, T-Mobile was #4. Now T-Mobile is #3. Not all the new customers came from Sprint, of course, but it shows that it was effective. Sprint lost enough and T-Mobile gained enough to change their positions in terms of market share rank.
"Our taxes destroyed our culture as we lived in an ice-fueled madhouse!"
T-Mobile's plan is $50/month to get unlimited talk, text, 1GB of high speed data, and the ability to have 1 phone. Back when Verizon was doing contracts it was about $90/month from them for the same. Now, if you get an expensive phone from T-Mobile and take the 24 month finance, the plan ends up being around $90/month with the payment and taxes.
Here they thing though: You pay off the phone, your rate drops down to $55ish/month (base plus taxes). It'll then stay at that rate as long as you keep your phone. Also, the rate is less if you get a less expensive phone. Get a cheaper phone, either used or less features, and you pay less because it cost less.
You save money so long as you are willing to keep older hardware, or buy cheaper hardware. It costs about the same only if you buy expensive hardware. Even then it is cheaper, because whereas T-Mobile wants about $90/month with an expensive phone, Verizon wanted that plus $200 up front.
Looking at Verizon now, it looks the same. $50/month (they divide it as $30/month for the plan, $20/month for the phone) gets you unlimited/unlimited/1GB. If you buy a phone up front, that's your rate. Finance it, and it depends on the phone price. That's much lower than when it was subsidized.
Now, hopefully the prices of decent smartphones will come down to a reasonable level. Why the hell pay $600-$700 got the latest from Samsung or LG when there are things like Ubik?
https://www.kickstarter.com/projects/ubik1/ubik-uno-solid-performance-smartphone-at-unbeatabl
Learning HOW to think is more important than learning WHAT to think.
While there is a place for $700-80 "flagship" phones, I hope this will force most smartphones to be sold at more realistic prices.
As a company named Sprint
They should really have two week contracts
So that I can feel more agile.
If I'm paying full price for something I would expect it to be an unlocked phone that I could use with any network as and how I see fit. If it's tied to the network, filled with their crapware, or crippled to prevent certain features from interfering with their profits, then screw them.
They've just gone to a payment plan iirc. So rather than $500 for the phone at once now you pay $800 over 2 years. It's only an extra $35 a month for the brand new UltraMega i6s+ smartphone!
The problem in the late 90s, was that people kept switching carriers frequently, and it was costing the carriers money. A basic phone was more expensive then, and so were minutes of talk. So, the carriers started subsidizing phones, and putting in 2 year contracts, to reduce churn. I don't know why the carriers would want to change that.
Of course, today, voice only phones are cheap, and so are minutes.
Sprint is also running a phone-leasing plan that lets people pay an additional $22/month for an 16GB iPhone, with yearly upgrades.
T-mobile doesn't carry contracts anymore, and gives monthly payment plans for phones. The one I have (an Android one), I pay an extra $5-10 a month (can't remember the actual number) which will get paid fully in a year. Should I decide to quit t-mobile, I have to pay the remainder of the phone upfront.
I like the way things are going. No contracts and no subsidies, with monthly payments as a low barrier of entry.
They give you deals until you are addicted and then they start charging you for it.
OMG, people will have to PAY FULL PRICE for their new shiny, how will humanity survive this apocalyptic disaster??
Just cruising through this digital world at 33 1/3 rpm...
... so people who want the latest and greatest phone but don't happen to have that kind of money burning a hole in their pocket to spend all at once can still get what they want. Oh, and these loans will be 3 to 5 years long.
File under 'M' for 'Manic ranting'
oh no. they were always paying at least the full true price if not the egregiously marked up msrp through total contract costs. the 'subsidization' thing was always illusory.
The price would be an increase for some people.
Take my plan for instance. Right now I buy my iPhone from AT&T on a subsidy for $200. The normal full price is $650, so the subsidy is $450 less.
Now my monthly cost of the contract is $50/mo. It's a 5-line FamilyTalk plan which costs $60 + 10 per additional line ($100 for 5 lines so $20 per user) and then plus whatever your data plan is. My data plan is $30/mo for unlimited data. Adding both together makes my monthly share of the bill $50.
If we take the $450 subsidy amount and divide it out into 24 months, which is how often I get another subsidy upgrade, that's $18.75/mo. There is no plan to get equivalent service to what I have now for 50 - 18.75 = 31.25/mo.
they wouldn't charge 80 bucks for the service.
For what service?
"Next"? Did you even read the *SUMMARY*, much less TFA? It's already possible to finance the phone, and the term is two years, not three to five.
Some people...
There's no place I could be, since I've found Serenity...
T-Mobile has gained a lot, and those customers have largely come from the other three carriers. There's not a lot of room for pure growth, everyone has a cellphone these days, so they mostly steal customers from each other.
T-Mobile's marketing was effective. Also their voice over WiFi proved to be a winner since it is a way to extend coverage without needing to buy a pico cell.