03-12-2013 09:26 AM
49 12
tools
  1. Marute's Avatar
    I often read how people sign up for 2 year contracts in the USA where they are locked to a specific carrier (e.g. AT&T, Verizon, Rogers etc.) and phone. This seems odd to me because it doesn't seem as a very liberal system in the otherwise liberal America.

    Where I live, you just go the store and buy a phone. Done. You can either pay it right away (which I believe most people do, I did with my Lumia 800) or over the course of 6 months if you don't have the money right now. In the process, you sign up for a subscription that fits your needs and you are good to go. Say you want another carrier; you cancel your subscription and sign up for a new subscription at another carrier.

    Why do people in USA bind themselves for 2 whole years? It seems crazy that you lock yourself to a store and are forced to buy whatever they want to throw at you without you being able to go somewhere else. In my head, it sounds like the store has all the power over the customer. Most often you'll see the store being there to suit the customer's needs, not the other way around.

    I was also wondering why the carriers receive specific handsets. This means that a phone is different depending on where you buy it. Where I live, a Lumia 920 is a Lumia 920 nomatter where you go.
    The ZennyBoy likes this.
    03-10-2013 05:39 AM
  2. Coreldan's Avatar
    They do it cos they don't really have much options.

    They get the phones for cheap. What you and me pay 600€ for, they pay 0-200$, but have to make that 2 year contract. Now, they could just buy the phone unlocked, but they would still be stuck with the crazy carrier prices. I dunno where you are from, but what the average US customer pays 100$/month for, I pay 10-15€/month. The carriers totally rip off people around there and since they all do it, buying unlocked hardly helps cos you still pay your *** off for one of the carriers. So to minimize their losses with the crazy carrier prices, better get the phone cheap through the 2 year contract.

    I believe the slightly different phones is due to being able to sell phones "exclusively" to a certain carrier. If for example AT&T is the only carrier that has Lumia 920s, that obviously means that the people who are dying to get one will make contract with AT&T. In return, AT&T will subsidize (I really dont know how to spell that, lol) the phones which means that Average Joe Customer will only pay that 100$ for the phone itself instead of 700$ :D Now, at the same time the phone manufacturer wants to sell the same exclusive deal to the other carriers too, so they make phones that are slightly different and make a deal with another carrier.
    03-10-2013 05:52 AM
  3. Marute's Avatar
    I'm from Denmark, I probably should have mentioned that. I payed 590 USD for my Lumia 800 in February 2012 which is not considered that expensive. However, everything is expensive in Denmark compared to many places so I'm not sure you can compare DK prices to US prices. I pay 31 USD a month for my subscription which gives me 1 GB data, unlimited sms and mms and time to call.

    So basically, since all the carriers have extreme prices and weird deals they can allow themselves to do this? I think the customer is the loser here, and I have to say I'm glad I don't have to buy a phone in the USA.

    I can imagine that if a store had a different approach with options, availability, liberalized products and customer service in focus they could make quite a lot of money. Unless people are too used to the system to see they are treated poorly. I have to say again it baffles me to see that this is how it works in the USA of all places.
    Raghu Gundlapalli likes this.
    03-10-2013 06:10 AM
  4. Huime's Avatar
    I often read how people sign up for 2 year contracts in the USA where they are locked to a specific carrier (e.g. AT&T, Verizon, Rogers etc.) and phone. This seems odd to me because it doesn't seem as a very liberal system in the otherwise liberal America.

    Where I live, you just go the store and buy a phone. Done. You can either pay it right away (which I believe most people do, I did with my Lumia 800) or over the course of 6 months if you don't have the money right now. In the process, you sign up for a subscription that fits your needs and you are good to go. Say you want another carrier; you cancel your subscription and sign up for a new subscription at another carrier.

    Why do people in USA bind themselves for 2 whole years? It seems crazy that you lock yourself to a store and are forced to buy whatever they want to throw at you without you being able to go somewhere else. In my head, it sounds like the store has all the power over the customer. Most often you'll see the store being there to suit the customer's needs, not the other way around.

    I was also wondering why the carriers receive specific handsets. This means that a phone is different depending on where you buy it. Where I live, a Lumia 920 is a Lumia 920 nomatter where you go.
    Contract binding phones are common among many countries. The original idea is provide a retailer loan to the customer in order to lower the bar for these people to be willing to subscribe for phone services. Alternately you can also understand it as "rent to own" scheme. If a subscriber wants to exit the contract, then he or she will pay for the remaining cost of the phone and walking away with no ties. Now it seems like a win win situation, but the way US carriers do it spoiled the fun.

    Not only these carriers lock their phone to their network, they make it as hard as possible to unlock the phone. Their user agreement is basically a scam. Take ATT for example, "AT&T will provide the Unlock Code upon request, provided that you meet certain criteria including, but not limited to the following......". Yes, as you can see, its an open term at their end, the "not limited to the following" basically sums up everything and render the rest of the terms meaningless.

    The second part of the deal is absolutely ridiculous: all carriers implement a double charge for their services. Not only the monthly is jack up -ed, the carrier charge both the caller and the receiver, and also applies the same to texting. And there is a trick, within the network voice services is "free". This makes it harder for some people to jump the ship as they have build their social ties within their carrier network.

    The third part is a smart trick to manipulate the American's lust for consuming. As you stay with the carrier for say 24 months, you will receive a discount for a new device purchase or a discount for the last bill of the current contract IF you do sign another 24 months with them. And think about the fact that if you jump ship, you lose that $70-100 ($199 for iPhone) discount plus an extra $30+ activation fees for the new carrier and a least 30 days pro-rate into the first monthly, and of course your phone might be too old (American standard) for the hassle to get an unlock code, we are looking at around $300 down payment for the transfer of carrier alone.

    Fourth part, the American has a rich lust, but poor cash.
    Last edited by Huime; 03-10-2013 at 06:48 AM.
    a5cent and aximtreo like this.
    03-10-2013 06:29 AM
  5. Coreldan's Avatar
    I'm from Denmark, I probably should have mentioned that. I payed 590 USD for my Lumia 800 in February 2012 which is not considered that expensive. However, everything is expensive in Denmark compared to many places so I'm not sure you can compare DK prices to US prices. I pay 31 USD a month for my subscription which gives me 1 GB data, unlimited sms and mms and time to call.

    So basically, since all the carriers have extreme prices and weird deals they can allow themselves to do this? I think the customer is the loser here, and I have to say I'm glad I don't have to buy a phone in the USA.

    I can imagine that if a store had a different approach with options, availability, liberalized products and customer service in focus they could make quite a lot of money. Unless people are too used to the system to see they are treated poorly. I have to say again it baffles me to see that this is how it works in the USA of all places.
    I guess the problem is that it's too widespread now as it's pretty much the default. "Voting with your wallet" hardly works if you want to have a mobile phone either..
    03-10-2013 06:37 AM
  6. a5cent's Avatar
    Contract binding phones are common among many countries.
    Very well explained Huime!

    I just want to add, that although getting a subsidized on-contract phone is common in many countries, the exclusivity deals are not. In most countries, customers can get ANY phone on ANY carrier. If you want a subsidy, the customer can have that too, but that comes with a contract and higher monthly rates.

    I paid $600 for my Lumia 800 upfront and I pay $20 a month for voice/data services. It's the only thing I get cheaper than my U.S. friends.
    03-10-2013 07:13 AM
  7. Marute's Avatar
    I just want to add, that although getting a subsidized on-contract phone is common in many countries, the exclusivity deals are not. In most countries, customers can get ANY phone on ANY carrier. If you want a subsidy, the customer can have that too, but that comes with a contract and higher monthly rates.
    That is exactly what I'm talking about. I too am used to having all phones available. May I ask where you live?
    03-10-2013 07:18 AM
  8. Coolknight1968's Avatar
    The US system works with credit. You subscribe and get a phone at a subsidized price. We have the same in Switzerland. So here we get the contract, get the subsidized phone, sell it if we don't like it. You always get subsidized phones here... Each time I renew one of my two subscriptions I get something. Once a year in fact... This year I will renew my subscription with Orange and I can get a discount on a locked or unlocked phone. I plan to get a HTC One :-)
    03-10-2013 07:23 AM
  9. a5cent's Avatar
    I can get a discount on a locked or unlocked phone. I plan to get a HTC One :-)
    Where can you get a locked phone in Switzerland?

    Also, don't forget that not everyone gets on-contract phones. In Switzerland, off-contract pay as you go plans are also very popular.
    03-10-2013 07:35 AM
  10. a5cent's Avatar
    That is exactly what I'm talking about. I too am used to having all phones available. May I ask where you live?
    Also in Switzerland, but it's pretty much the same system everywhere in Europe... except the U.K.
    03-10-2013 07:47 AM
  11. Zokudu's Avatar
    One thing no one here has mentioned is none of the major us carriers can use the same phones. AT&T has the 920 mostly because AT&T uses GSM on bands that a lot of the world supports. Nokia can give them the same phone.

    T-mobile uses much lesser used bands for their GSM and you cannot actually get HSPA+ or LTE speeds with a 920 on T-mobile even if you unlock it. Verizon and Sprint both use CDMA which means no 920 can work on their network. Even then Sprint and Verizon have different CDMA setups so phones cannot work on both networks.

    That's why we have so many carrier exclusive versions. Nokia needs to make a new 920 with Verizons CDMA to work with Verizon. Hence why you see them talking about that in the wpcentral news.

    Another thing is we do have prepaid carriers similar to you. However over here because our network tech is different for each carrier you need to find an MVNO that resells AT&Ts network and again now AT&T is in control. For instance their new thing is I heard their limiting MVNOs to 1.5GB of data per customer.

    Any way you slice it if you want a 920 in the US you need to be on AT&T. There's nothing stopping you from walking into a store and buying a 920 off contract. It just still only works with them.

    I'm not Canadian but its my understanding the problems are similar to the US. Rodgers has the rights GSM bands and that's where you want to be with a 920. They also have 3 year contracts.
    a5cent, Laura Knotek and LeLee092 like this.
    03-10-2013 08:12 AM
  12. Huime's Avatar
    One thing no one here has mentioned is none of the major us carriers can use the same phones. AT&T has the 920 mostly because AT&T uses GSM on bands that a lot of the world supports. Nokia can give them the same phone.

    T-mobile uses much lesser used bands for their GSM and you cannot actually get HSPA+ or LTE speeds with a 920 on T-mobile even if you unlock it. Verizon and Sprint both use CDMA which means no 920 can work on their network. Even then Sprint and Verizon have different CDMA setups so phones cannot work on both networks.

    That's why we have so many carrier exclusive versions. Nokia needs to make a new 920 with Verizons CDMA to work with Verizon. Hence why you see them talking about that in the wpcentral news.

    Another thing is we do have prepaid carriers similar to you. However over here because our network tech is different for each carrier you need to find an MVNO that resells AT&Ts network and again now AT&T is in control. For instance their new thing is I heard their limiting MVNOs to 1.5GB of data per customer.

    Any way you slice it if you want a 920 in the US you need to be on AT&T. There's nothing stopping you from walking into a store and buying a 920 off contract. It just still only works with them.

    I'm not Canadian but its my understanding the problems are similar to the US. Rodgers has the rights GSM bands and that's where you want to be with a 920. They also have 3 year contracts.
    This is not really a problem with ATT and Tmo customer. Quad band phones are common for almost half a decade. The problem is with the data side. However Nokia has been making penta band phones for some time and my N8 used to work fine on all GSM network until 4G became along and started the split.
    Laura Knotek likes this.
    03-10-2013 08:39 AM
  13. Marute's Avatar
    our network tech is different for each carrier
    Is there a benefit from this? Because in my head it just sounds rather stupid. It sounds like a "US Cellphone Mafia" to me. :-P
    palandri, Etios, eeewing and 1 others like this.
    03-10-2013 08:39 AM
  14. a5cent's Avatar
    One thing no one here has mentioned is none of the major us carriers can use the same phones.

    Another thing is we do have prepaid carriers similar to you.
    Actually, most countries don't have prepaid carriers. Prepaid plans are another one of those things that are usually available on ANY carrier, though there are slight differences in cost structure and data limits.

    You make a good point about the different wireless tech used by each U.S. carrier, though it bears the question whether the U.S. telecom industry can't, or simply doesn't want to solve that issue. Hint hint... it's the later.
    03-10-2013 08:52 AM
  15. Zokudu's Avatar
    This is not really a problem with ATT and Tmo customer. Quad band phones are common for almost half a decade. The problem is with the data side. However Nokia has been making penta band phones for some time and my N8 used to work fine on all GSM network until 4G became along and started the split.
    So you're saying every time phone manufacturers solve the problem they remake it? Imagine that.

    As far as why this happens its just the nature of how mobile evolved in the US. CDMA was built here while GSM was invented in Europe. Some carriers saw the value in GSM and implemented it here some stayed with CDMA. We also sell frequencies so in the US no one is even allowed to build a network to compete on the same bands as AT&T. There's a reason they bought those bands.
    03-10-2013 08:54 AM
  16. Zokudu's Avatar
    Actually, most countries don't have prepaid carriers. Prepaid plans are another one of those things that are usually available on ANY carrier, though there are slight differences in cost structure and data limits.

    You make a good point about the different wireless tech used by each U.S. carrier, though it bears the question whether the U.S. telecom industry can't, or simply doesn't want to solve that issue. Hint hint... it's the later.
    Actually its because the FCC in the US sells radio frequencies. AT&T owns those GSM bands. If someone else was allowed to build a network on it they probably would. As it is T-Mobile cannot do that and they are left with the crappy leftover bands.


    I will give you the prepaid thing but I was more referring to how MVNOs work. You can post pay an MVNO if they offer a plan like that but the point of them being locked into an AT&T network contract is more the major idea here.
    03-10-2013 08:57 AM
  17. a5cent's Avatar
    Is there a benefit from this? Because in my head it just sounds rather stupid. It sounds like a "US Cellphone Mafia" to me. :-P
    No benefit, but also no mafia. Just the way it developed. Most importantly, carrier lock-in is in the best interest of U.S. carriers, so they have no reason to change.
    LeLee092 and Zokudu like this.
    03-10-2013 09:02 AM
  18. a5cent's Avatar
    Actually its because the FCC in the US sells radio frequencies. AT&T owns those GSM bands. If someone else was allowed to build a network on it they probably would. As it is T-Mobile cannot do that and they are left with the crappy leftover bands.
    Yes, absolutely, but if the carriers agreed that this situation needed to change, they could send half a lobbyist to Washington and have the situation sorted before breakfast.

    From a technical point of view, solving the frequency sharing issues is child's play. It's just that business interests get in the way of wanting to do that. As long as carriers can get away with it, they should and will prioritize their own interests over their customer's.
    03-10-2013 09:18 AM
  19. Huime's Avatar
    So you're saying every time phone manufacturers solve the problem they remake it? Imagine that.

    As far as why this happens its just the nature of how mobile evolved in the US. CDMA was built here while GSM was invented in Europe. Some carriers saw the value in GSM and implemented it here some stayed with CDMA. We also sell frequencies so in the US no one is even allowed to build a network to compete on the same bands as AT&T. There's a reason they bought those bands.
    Nope, you misunderstand the need for quad/penta band. They are not for the Americans. Multi-band phones came along when the manufactures are able to squeeze in a much as they like for a fraction of the cost. However the cost saving for having a same design for global market is more than enough to cover that tiny cost by the mult-iband antenna.

    While CDMA vs GSM is another story all together. The rest of the world prefer GSM due to its flexibility and as a consumer I am glad that the became the world standard.
    03-10-2013 09:52 AM
  20. palandri's Avatar
    Moved to the carrier forum. Redirect left in Off Topic.
    03-10-2013 10:03 AM
  21. erekshun's Avatar
    I often read how people sign up for 2 year contracts in the USA where they are locked to a specific carrier (e.g. AT&T, Verizon, Rogers etc.) and phone. This seems odd to me because it doesn't seem as a very liberal system in the otherwise liberal America.

    Where I live, you just go the store and buy a phone. Done. You can either pay it right away (which I believe most people do, I did with my Lumia 800) or over the course of 6 months if you don't have the money right now. In the process, you sign up for a subscription that fits your needs and you are good to go. Say you want another carrier; you cancel your subscription and sign up for a new subscription at another carrier.

    Why do people in USA bind themselves for 2 whole years? It seems crazy that you lock yourself to a store and are forced to buy whatever they want to throw at you without you being able to go somewhere else. In my head, it sounds like the store has all the power over the customer. Most often you'll see the store being there to suit the customer's needs, not the other way around.

    I was also wondering why the carriers receive specific handsets. This means that a phone is different depending on where you buy it. Where I live, a Lumia 920 is a Lumia 920 nomatter where you go.
    you also forgot the $350 early termination fee
    03-10-2013 11:07 AM
  22. palandri's Avatar
    The problem with U.S. Wireless Carriers is they don't play free market capitalism; they play follow the leader capitalism. It works like this, If they are getting $50 month, we should be able to $60 a month. If they can get $60 a month, we should be able to get $70 a month. If they get $70 a month, we should be able to get $80 a month. If they get $80 a month, we should be able to $90 a month...and so on... Plus they want everyone locked into a 2 year contract. Plus they don't give discounts on rates if you buy the phone outright.
    03-10-2013 11:28 AM
  23. Dustin Hodges's Avatar
    This is not really a problem with ATT and Tmo customer.
    Actually, it is. I own an unlocked lg quantum that supports the 850 MHz, 900 MHz, 1800MHz, and 1900 MHz bands/frequencies. T-Mobile also supports the 1900 MHz band/frequency for 3G/4G-HSPA+ use. Problem? I only get 2G/EDGE, even when in a 3G area. Why? Because only areas where T-Mobile refarmed their PCS (UMTS frequency band II) Spectrum are using 3G on the 1900 MHz frrequency. Everywhere else, ATT uses 1900 MHz for 3G while T-Mobile gets use of the 1900 MHz frequency for 2G and EDGE.

    So even a quadband phone (such as mine, seeing as it supports 4 different frequency bands) doesn't work right, due to carriers using different bands of the same frequency (because 2 carriers cant operate on the same exact band on the same exact frequency)
    Last edited by Dustin Hodges; 03-10-2013 at 11:37 AM. Reason: added lg name to clarify my phone model
    03-10-2013 11:36 AM
  24. Huime's Avatar
    Actually, it is. I own an unlocked lg quantum that supports the 850 MHz, 900 MHz, 1800MHz, and 1900 MHz bands/frequencies. T-Mobile also supports the 1900 MHz band/frequency for 3G/4G-HSPA+ use. Problem? I only get 2G/EDGE, even when in a 3G area. Why? Because only areas where T-Mobile refarmed their PCS (UMTS frequency band II) Spectrum are using 3G on the 1900 MHz frrequency. Everywhere else, ATT uses 1900 MHz for 3G while T-Mobile gets use of the 1900 MHz frequency for 2G and EDGE.

    So even a quadband phone (such as mine, seeing as it supports 4 different frequency bands) doesn't work right, due to carriers using different bands of the same frequency (because 2 carriers cant operate on the same exact band on the same exact frequency)
    Not sure about contract phones at that time 2006-09 but nokia N series usually comes with 2100 for Tmo's 3G and 850/1900 for ATT's 3G, but of course if you are one of those Tmo 1700 3G area you are probably left out. But at that time even ATT's 3G covers only limited areas and focus on big cites. My place for example we got 3G very late and is about a year later ATT rolled out 4G instead along with those huge *** HTC phones.
    03-10-2013 12:12 PM
  25. AlexRodriguezNY's Avatar
    I prefer buying the phone full price that getting it for cheap and having to sign a two year contract.Once you sign that contract you are ****ed up.Cause if you break it you have to pay fees and if you stay at the end of the two years you end up paying for the price of your phone like 4 or 5 times. I don't know why people still falling for contracts.If you want a device and don't have the money right away don't sign a contract. Save until you have it to buy it full price. If you can pay $60 or even more for a monthly phone bill then you can save $500 to $700 in no time to buy a phone full price.In the long run you will be saving a lot.
    03-10-2013 12:15 PM
49 12

Similar Threads

  1. When will Sim-Free / Carrier Free Phones get the 7.8 update?
    By androidnav in forum Microsoft News & Rumors
    Replies: 2
    Last Post: 01-20-2013, 06:28 PM
  2. I don't get the Facebook Microsoft relationship
    By ammarmalik2011 in forum Microsoft News & Rumors
    Replies: 8
    Last Post: 01-16-2013, 04:31 AM
  3. Replies: 3
    Last Post: 09-19-2012, 05:38 PM
  4. Replies: 8
    Last Post: 05-14-2012, 08:08 PM
  5. Replies: 6
    Last Post: 01-31-2011, 06:55 PM
LINK TO POST COPIED TO CLIPBOARD