T-Mobile has been getting a fair amount of attention for its decision to terminate smartphone subsidies.
I want to be excited about this. Or, more excited about this than I am. This is, to my mind (as with Yglesias’s) how things should work. And T-Mobile, as a company, has always done business the way that I want cell phone companies to do business. I am not a T-Mobile customer due to their complete lack of coverage in my part of the country. That’s a bit of a cop-out, though. There was a regional carrier that I could have signed with and chose not to. Good people though they were, they couldn’t provide me with the service I wanted.
I am currently under contract with The Dark Side. They were the only ones that could.
Anyhow, T-Mobile is in a similar situation where they are virtuous because they have no claws. It is not likely the other major carriers will follow suit. Further, for it to be really advantageous, we’d need common standards and unlocked phones so that I can take my phone from one company to another. If I were to switch to T-Mobile, I’d need to buy a new phone. So whether we’re buying our own phone or accepting a subsidy, we’re talking about significant barriers to exit.
My sister-in-law recently recruited my help to set her up with a modern smartphone and mobile plan for her relocation to Alaska. Alaska is a peculiar case as far as mobile phones (and many, many other things) go, but it got me looking at the various options out there. For a whole lot of people who aren’t me, the arguments in favor of prepaid plans are becoming stronger and stronger. It may even be something I look at when our contract with The Dark Side expires. The prepaid market works more closely to how I think things should work and are increasingly including things – like unlimited whatever – that keep me deciding between the big boys.
Now, most (all?) of those carriers rely on either AT&T and Verizon’s networks (do any of them use Sprint?). Which makes me wonder about the long-term viability of this, if their leasing out their lines is cannibalizing their own business. I don’t think such leasing is actually required (I remember reading that T-Mobile was approached but declined), so if the downmarket carriers get too competitive, the big two can put a stop to that.
Honestly, though, I’d actually consider it desirable to have two overlapping national networks if we ended up primarily having competition on the storefront level.
“do any of them use Sprint?”
Yes, apparently, & it looks like they’re expanding it to be under their own brand: http://www.pcworld.com/article/2023646/sprint-expected-to-launch-prepaid-service-on-january-25.html
(This was the Worse Trivia Question Ever)
This is one of the area’s where Matt Y bugs me especially with this arguments that seem to his privileged background, Dalton-Harvard background. It is also why pure economics drives me up the wall with its refusal to consider the non-quantifiable and human aspect of our lives.
I understand why it is more economical in the long run to buy an unsubsidized phone but for some practical and messy realities.
1. People don’t always have the money to lay down 600 dollars up front.
2. Is it better to pay 200 dollars and get locked into a 2-year plan or to put 600 dollars on a credit card and then pay the credit card interest as you pay down the cost on the 600? I can see why 200 dollars and no credit card interest are more attractive to people.
This is not to say I am against T-Mobile’s plan or don’t think paying full cost should be an option but there is something annoying about Matt Y being paid to be an amateur economist spouting the neo-liberal line without knowing jack about the lives of people,. His arguments for more price gouging were infuriating because of his ability to afford price gouging with more ease than many others.
ND, I had the same thought, but apparently T-Mobile has a payment plan in mind. Which will be sort of like a contract, except that (a) if you make your own phone arrangements or (b) you pay off your phone, you stop having to pay the premium that everybody else pays.
This is actually where T-Mobile’s noble phone policies matter. Even if you’re not wealthy, you can go out and get a Chinese knock-off for relatively cheap and it will work on T-Mobile’s network without incident. Or you can buy used. Or you can bum off a friend who recently upgraded and has a spare.
That being said, I don’t think it’s the complete win that MattY thinks it is for the reasons outlined in the post. It doesn’t work as well if one carrier does it. Most people don’t know where to get or how to appraise Chinese phones. Most people don’t want a hand-me-down phone (or a Chinese knock-off). And they don’t trust eBay. And, most importantly, most likely cannot take their previous phone with them to T-Mobile (unless it’s an unlocked AT&T phone).
This is how it works in most of the rest of the Western world for cell phones. There are still some subsidies depending on the mobile culture of the country, but usually, there are three options depending on the nation.
1. Pre-Paid, with no contract and you’re paying full freight for the phone.
2. Some subsidy, but instead of paying $200 for a phone up front, the price of the phone is split up in your contract.
3. No subsidy, but again, instead of paying $500 up front, it’s split up along the life of the contract.
Yep. By and large, I like the way other countries do it better.
(That being said, I may not be appreciating what the American model has actually accomplished, given the obstacles we face.)
Well, the reason why other countries had a jump on us for mobile access during the early to late 90’s is the US actually built a connected, working landline system while in European and Asian countries, they were either never built that great or just never finished for a variety of reasons, so mobile phones were a Godsend.
As a result, cell phone companies had to figure out a way to basically buy consumers. Thus, contracts, kinda crappy plans, and such.
We also have duplicate and overlapping networks. And a much swath of land, per-capita.
Still, they’ve got 3G in Whitehall, Montana, and 4G in Twin Falls, Idaho. That in itself is pretty impressive to me.
You know, I’m on my fifth two-year contract with the company you seem to dislike so much. I have no complaints at all. Of course, that’s in no small part due to the fact that Mrs. Likko and I have been grandfathered in to the older, flat-fee unlimited data plan for our phones. They’ve honored their commitment to us to give us all the data we can eat, so we consume more data than the regular users. That, and they really do have the best phone coverage for everywhere we go. I really have nothing to complain about.
This is going to sound sarcastic, but… with the exception of the “upgrade charge” incident, and that they took me off the unlimited data plan accidentally and cannot put me back onto it, I have very little to complain about personally. Better coverage than AT&T at a similar price (we do get a discount). They’ve been responsive every time I have called customer support.
So it’s not that I am getting a raw deal. It’s that I am getting a pretty good deal… from the devil.
But I am too weak to go to a company with more righteous policies.