I don't get this "on contract" thing for phones

[hisham691]

I'm from Syria "of course you here the news" so we don't have this on contract thing for phones so I would be happy if someone make it clear for me

 

[jmshub]

In the United States, the carriers subsidize our phones. In other words, instead of paying the full retail cost of a cell phone, you buy your phone for a lower cost from the carrier, and then you are under contract for a term of typically two years. During that time, your phone is SIM locked to that carrier, so the firmware on the phone actually blocks other carriers' SIM cards from working in that phone.

For example, A Lumia 1520 costs somewhere around $500 unlocked in the US. If I went to at&t today, I could pick up the phone for probably $99 or $199. The rest of the cost of the phone is quietly added into the monthly bill for the phone service. For two years, that phone is locked to my at&t SIM, so I can't switch SIM cards to put that phone onto another cell network.

 

[Funky Cricket]

We are also obligated to pay their rates for Phone and Data service for the length of that contract, even if they have better offers after we have signed up, if we want to change, they make us resign a contract for another 2 years. To get out of the contract is normally a couple hundred dollars US.

Essentially, You are stuck for 2 years on the same phone and pricing with very few exceptions unless you buy your phone out right, or don't mind paying to end the contract.

 

[hisham691]

It means that the rest of the price is paid monthly right ?? .. And when those two years come to an end will the phone be unlocked ??

 

[Bobvfr]

The phone is yours but you would then need to get it unlocked, this is normally not too difficult, however what the carriers do is offer you a replacement a couple of months before to keep you locked in, and as tech is constantly moving this is often a tempting offer.

Although with my HTC HD2 I kept it with the same carrier for another year but lowered the price of the contract until I couldn't resist my 1520 any more.


Bob

 

[hisham691]

In overall which one is better? on-contract phones or sim-unlocked ?

 

[trekgraham]

I am with T-Mobile,I have no need for a contract personally....