There's an interesting editorial by Chris Ziegler over on Engadget today, pointing out to its USA readership that the current carrier pricing strategy really doesn't make sense anymore, with European carriers showing the way, pricing all phones at free on contract, with just the monthly amount changing. Nice insight for Americans, though it's a pity there's no mention of the even more radical way of buying smartphones - SIM-free. A few more thoughts below.
Read on in the full article.
ummmm that's probably because half the cellphones in the states don't use SIM cards maybe?
That has been done in the US for a while.
T-Mobile USA has something called 'Even more plus'
and 'FlexPay' that allows it.
I'm currently using an $529 Nexus One with my "Grandfathered" $5.99 unlimited data.
>>ummmm that's probably because half the cellphones in the states don't use SIM cards maybe?
They don't? I knew they had a couple of different standards, but no SIMs at all? This is Verizon and Sprint?
Like stepping back into the stone age.... [mutter]
Still, my point stands. At&T and T-Mobile do use SIMs, I believe, along with GSM/3G? Buying SIM-free would still work for these?
But just like Steve says, American consumers should also try to take that last step and just start buying unlocked phones.
There are also some US phone manufacturers that still can't take a hint in this matter it seems:
http://www.mobileinfoplanet.com/blog/blog1.php/2010/01/26/what-is-wrong-with-palm
The PAYG/Sim-free approach only really works if you are a light user or want the freedom to switch networks.
I've been on a �20 per month SIM-only deal for a while, buying phones SIM-free, but I'm about to switch to a full contract - I can still pay the �20 per month I am now and get everything I need, but will also get a couple of hundred pounds knocked off the price of a new device.
There's nothing to stop me from switching to a SIM-free device mid-contract if I fancy a change, and can sell the contract phone to subsidise that.
I agree that it is worth looking at all options though. It amazes me how many people just accept whatever they are offered - I suspect most (non-business) users are probably one tariff higher than they need be.
Feel free to cut me down if you think I'm totally deluded, but I would like to explain how I perceive the value of contracts in the uk
My personal situation is as follows, been on contract the last five years, essentially buying the phone in the monthly price of the contract. Gotten sick of this, feeling very locked down with my contract with the final six months of your common or garden 18 month plan, as technology progresses (the smartphone space for me it getting crazy, looking like yearly upgrades for the next couple of years), not to mention the fear of loss or damage within that contract period.
I've recently toyed with the idea of sim free + sim only contract to seperate the cost of phone and calls (PAYG not an option because I have an awesome and memorable number that I don't want to lose) . But an impending showdown with orange retentions in the next few months has made me take stock of what I would like to walk away with from that particular conversation, and how much I'm willing to pay per month purely for my package.
As someone who's phone is my primary means of communication, a package that offers flexibility and completeness is quite valuable. I may not make a lot of calls on average but require the minutes if for example one month, I'm required to make many, especially to mobiles. I also need unlimited data. I value this between �20-�25
It occurred to me that if I was guaranteed to be happy to continuing spending this amount of money, that the contract length was essentially invisible, especially if I wasn't relying on the phone to be provided. A 24 month contract that the user is willing to commit to is a powerful bargaining tool in acquiring a handset that is truly free. Like I said new handset, every 12 months sim free. But if I can get the phone that I would have to for free for what I would pay for calls with the only cost being commitment... I've saved �400
Kind of psychological, i know. But it's the way I see it
You can go PAYG and keep your number, it's the same PAC code system. I've done it.
My phone usage does not suit contract at all. I personally never liked a 12 month tie-in and once 18 months became normal that was the end of it for me.
I was concerned about data when I went PAYG, but as it turns out even my constant data use, notifications and push email barely scratch the surface of my unlimited capped data allowance on PAYG.
So my solution, allow the comfort zoners to pay for my phone with their contracts, then I collect it from Ebay later (iPhone 3G perfect condition, boxed with all accessories on Ebay �150) and pay a tenner a month for all the use I want.
My 5800 came brand new from Carphone warehouse via a trade-in, paid �50 cash, unlocked. I use this on an ASDA sim, 8p calls, 4p texts + all the WiFi I can eat free from most places I can use it.
I believe a majority of people who have taken a phone on contract barely touch their allowances. Most would do better on PAYG.
Buying smartphones sim-free is definitely not radical. That's what my country (Malaysia) has been practicing all the while. I guess the iPhone is the first smartphone to start a full-fledge contract concept here.
I dont buy my car and fuel from the same dealer, either.
Steve is correct. You can buy a Pay-N-Go card from AT&T and T-Mobile in the US. I do it often when I travel however, the iPhone will not allow a data connection as it is tied to a contract. AT&T purposely disables on PNG SIM cards when used in an iPhone. I simply went around them and used my N86 will JoikuSpot and my iPhone thought that it was connected to wifi all of the time. I was Skype'g, and Fring'g all the while without AT&T even knowing.
Their model is terribly screwed up.
Similar model to the US in Canada. However the prepaid option can't work here. No smatphone data plans available and really expansive minutes.
To force contracts, carriers offer the best monthly plan and throw free options only for contracts. You can be on a per-month plan but you pay more than someone with a plan. Another horrible thing is that you have to take a 3-year contract to have a decent subsidy and have the plan "bonuses" . A 1 or 2 year plan only saves you around 50 to 100$ of the full phone price.
As someone living in the US and trying to buy my phones unlocked I have to say it's still quite difficult. As someone posted, we have Verizon and Sprint which use CDMA, so those phones don't use SIM's at all.
So an unlocked phone only lets you move your phone between T-Mobile and at&t. But because those carriers use different frequencies for 3G data, any device will have 3G on only one of those networks and have to be EDGE-only on the other. :frown:
I've bought a few unlocked phones and use them with my old T-Mobile SIM which was purchased on contract. However, I have no idea how to purchase just a SIM for at&t. I remember being in Canada a few years ago and seeing SIM cards on a rack for sale in a convenience store. I've never seen such a display here in the US. Here, even for pay-as-you-go services, you usually have to buy a phone with the card inside. I'd love for someone to tell me I'm wrong about this, though!
I think the most revolutionary thing in phone buying recently, is what o2 Germany is doing.
You buy an unlocked phone from them, paid monthly with quite nice interest (or even no interest). And than you pick a plan, which you can cancel anytime and which is independent from the phone.
That's the most flexible and transparent carrier model I have seen to date.
seem to remember hearing on recent tcpj or engadget mobile podcast that the US gsm carriers are getting wise to the unlocked route and will be charging an extra tariff for the 'privilige' of using a sim free phone.
they're also requiring data tariff's on all smart and several feature phones, whether you actually use data or not.
North American cell carriers are the oil barons of the modern US (and Canada) continent. They were god awful when i dealt with them for business 8 years ago, and they're even worse now.
I'm hoping that the newcomer to Canada, Wind, makes a go of it. But i can see the established companies like Rogers, Telus, etc trying to kill the competition.
So often in Britain consumers are given the shit end of the stick, but for once it seems we are quite lucky with phones.
No only are there the main carriers Voda, O2, Orange/TMobile and 3, but any old business can set themselves up as a sim-issuing cellphone company if they do a deal to piggy back on one of the main carriers networks. So, supermarkets ASDA and Tesco, Virgin, Truphone TravelSIM and loads of companies offering specialist international rates like GO-SIM all add to the competition. And each of these have their own combinations of contract and PAYG and hybrid plans like contract with 30 day notice opt-outs.
And the law means that a company must unlock their phones if requested (small fee for this) and any of us can just request a PAC and change to another SIM within a week, taking our number with us. I've have the same number for 7 years, and been through o2, Voda, 3, EasyMoblie (now defunct), Virgin, T-Mobile, ASDA and currently thinking about going back to O2. I also have four or five SIMs for use for odd jobs that I change to when needed for reasons of coverage etc.
The CDMA standard doesn't require the use of SIM cards, and so Verizon and Sprint don't use them. That may change as Verizon adopts LTE, but I wonder if Verizon will follow Apple's lead (for the iPad) in promoting the use of the micro-SIM for the phones it adopts. In any case, VZW will be running dual-mode CDMA/LTE phones for quite a while, so we are probably still a few years away from true interoperability in the market.
slitchfield wrote:>>ummmm that's probably because half the cellphones in the states don't use SIM cards maybe?They don't? I knew they had a couple of different standards, but no SIMs at all? This is Verizon and Sprint?
Like stepping back into the stone age.... [mutter]
Still, my point stands. At&T and T-Mobile do use SIMs, I believe, along with GSM/3G? Buying SIM-free would still work for these?
I think the non-GSM carriers don't use a SIM card, thats a GSM standard.
Unregistered wrote:The PAYG/Sim-free approach only really works if you are a light user or want the freedom to switch networks.I've been on a �20 per month SIM-only deal for a while, buying phones SIM-free, but I'm about to switch to a full contract - I can still pay the �20 per month I am now and get everything I need, but will also get a couple of hundred pounds knocked off the price of a new device.
There's nothing to stop me from switching to a SIM-free device mid-contract if I fancy a change, and can sell the contract phone to subsidise that.
I agree that it is worth looking at all options though. It amazes me how many people just accept whatever they are offered - I suspect most (non-business) users are probably one tariff higher than they need be.
I don't think you quite understand UK contracts.
SIM only tariffs generally offer considerably more minutes/texts/data than an equivalently priced with phone tariff.
If you try to swap over to SIM only part way through your contract, your carrier will basically view it as you trying to get out of your contract, and you'll have to buy yourself out of the remainder.
I'm a T-Mobile USA customer and I generally think of the cost as handset + 2 years of service.
So if the phone is free and I pay $80 a month or if I pay $480 for the phone and $60 a month that comes out to the same after two years.
Interest rates these days are low so I'm not factoring in future value of money. :P
The article points at a $100 iPhone 3G with a 2MP camera without auto-focus as a benchmark. While the author mentions that the monthly plan can add up to more than $3000 after a two year contract is up, he fails to point out that other US carriers have plans that charge noticeably less for their service plans.
(I'm not trying to promote one carrier over another, but AT&Ts plans are not cheap. The cost is probably closer to $2500 than $3000 for most, but that is still a lot.)
T-Mobile now has the Even More Plus plans, which basically do the opposite of what the article suggests... don't subsidize the phones at all, but provide discounted, contract free service plans. I find this ideal for a customer interested in buying an unlocked phone or keeping a phone for 3+ years. -- Is using a phone for more than 3 years considered scandalous on this forum? 😉
As another post commented, you have to check the unlocked phone frequencies to see if the handset will provide you with 3g (fast) or just edge (slow) support on the carrier you are on.
Something else to keep in mind is spectrum fragmentation. US airwaves are crowded, and the frequency bands used in the Europe and Asia don't work here. Add that to the fragmented technology and it is easy to see why people stick with carriers and the subsidy model.
AT&T and VZW currently not only use incompatible technologies, but they occupy different frequencies. T-Mobile and Sprint use the same spectrum, but incompatible technologies. AT&T and T-Mobile use the same 3G technology, but different frequencies. 3GSM actually made things worse. At least under 2G, AT&T and T-Mobile shared spectrum and technology (and indeed a network in many locations).
That may change in a few years as AT&T and Verizon start using their new 700MHz spectrum. One of the rules in the auction for that space was that devices had to be interoperable on at least some of that space (to avoid the CDMA/GSM divide we have now). Unfortunately, this leaves Sprint and T-Mobile in the cold, since they didn't participate in the 700MHz auction, but the competition between the top two carriers will likely ramp up then.
Here are the reasons why no one buys unlocked phones here in the US (as seen through my limited view of the world):
1. Half of users here in the US are on Verizon and Sprint, and do not understand the phrase "unlocked phone". I'd be willing to bet that even the majority of people on AT&T and T-Mobile don't know what it means to unlock their phones. They just assume that certain phones must be used on certain networks and that's just the way the universe works.
2. Carrier mobility doesn't really exist, even between AT&T and T-Mobile because of the hardware incompatibility in their 3G frequencies.
And the big one...
3. Historically, there has been no monetary incentive to buy an unlocked phone because carriers did not offer you a discounted monthly rate for bringing your own phone. If you bought a subsidized locked phone from AT&T, it might cost you $99 up front with an $80 a month plan. If you bought the phone unlocked for $500 and signed up for the same plan, it cost you...$80 a month. With this kind of math, who in their right minds would buy an unlocked phone? T-Mobile has changed the scene recently with the introduction of the Even More Plus plans, which give you cheaper rates for unsubsidized phones, but I've found that people a) don't really know about it and b) think T-Mobile sucks.
Unregistered wrote:
And the big one...
3. Historically, there has been no monetary incentive to buy an unlocked phone because carriers did not offer you a discounted monthly rate for bringing your own phone. If you bought a subsidized locked phone from AT&T, it might cost you $99 up front with an $80 a month plan. If you bought the phone unlocked for $500 and signed up for the same plan, it cost you...$80 a month. With this kind of math, who in their right minds would buy an unlocked phone? T-Mobile has changed the scene recently with the introduction of the Even More Plus plans, which give you cheaper rates for unsubsidized phones, but I've found that people a) don't really know about it and b) think T-Mobile sucks.
^This.
It's likely the number one reason few Americans, even with the two GSM carriers, buy an unlocked, unsubsidized phone, say, something from Nokia.
If I buy an E72 and bring it unlocked to AT&T, I would pay the *exact same rate plus data plan* as a subsidized iPhone user on AT&T. So what's the incentive to buy unsubsidized?
Yes, T-Mobile just recently introduced the Even More Plus plan; the problem is that T-Mobile coverage outside of major metropolitan areas is spotty at best.
Here in Chicago, the largest store where you can buy unlocked devices, the Nokia Flagship Store on Michigan Avenue, is closing later this year. Otherwise I couldn't tell you where to buy one at a brick and mortar store here. And yes, AT&T and T-Mobile offer SIMs, but most people with a gun to their head couldn't tell you where it is in their device or how to change it. As for pay as you go plans, they carry a stigma of being for poor people or those with bad credit. I didn't make this up, just sharing.
There simply isn't the awareness of unlocked devices in the US. It even hasn't caught on with the "green" people who are against consumerism and electronics waste. But when I tell people about it, it makes complete sense to them.
For the most part it has been about the providers and not the device. As much as the iPhone has changed that, people will suffer and pay in buckets of blood for crap AT&T service and needless contract extensions over and over and over and...
mp/m
Might also be worth pointing out that the concept of 'last for ever topups' PAYG does not exist in the USA. Unlike in the UK where my wife's emergency PAYG phone is still active on a �5 topup she paid about 4 years ago, PAYG credits in the USA are lost after a certain time (1 month for a $10 topup, 3 months for a $25 topup). So it is not such an attractive option for users.
OK, so it's starting to make sense.
Carriers are almost too powerful in the US, the two standards have allowed them to minimise the effect of competition.
So, to do well there a phone company needs to be powerful enough to kick the carriers around (like Apple are) or:
Do what the carriers want - like everybody else.
Fair play to Nokia for having none of it.
Steve,
I am not american but I live in USA. I am not a heavy user and dropped the contract for a year now. I pay a quarter for a minute to talk. When I purchase $100 credit, ATT gives me $10 bucks credit for free. $110 last 3 month, so my monthly bill is $33 (remember, $10 are given by ATT). I can purchase features like 200 messages for $4.99 or 1000 for $9.99 and 1 mb data for $4.99 (enought to use the GPS) or 100 mb for $19.99. I use wi fi at home and at work, so I don't purchase any data and prefer to pay the full price for data when I use the GPS. Map doesn't require a lot of data to fix the GPS.
So $33 for talk, $4.99 for 200 messages = $37.99. Not bad. Before that, I had a family plan for my daughter and me. The cost was the double of what I pay now. And I am free to buy the brand I like, even if Nokia is hardly ever to find in our country.
Unregistered wrote:Steve,I am not american but I live in USA. I am not a heavy user and dropped the contract for a year now. I pay a quarter for a minute to talk. When I purchase $100 credit, ATT gives me $10 bucks credit for free. $110 last 3 month, so my monthly bill is $33 (remember, $10 are given by ATT). I can purchase features like 200 messages for $4.99 or 1000 for $9.99 and 1 mb data for $4.99 (enought to use the GPS) or 100 mb for $19.99. I use wi fi at home and at work, so I don't purchase any data and prefer to pay the full price for data when I use the GPS. Map doesn't require a lot of data to fix the GPS.
So $33 for talk, $4.99 for 200 messages = $37.99. Not bad. Before that, I had a family plan for my daughter and me. The cost was the double of what I pay now. And I am free to buy the brand I like, even if Nokia is hardly ever to find in our country.
That sounds scandalously expensive to me.
I use an unlocked 5800 XM as an AT&T Gophone. It wouldn't work for many, but it fits perfectly with my needs.
Here is the original plan:
http://forum.brighthand.com/showpost.php?p=1757873&postcount=1
And here is the 6 month update (I'm now at 10 months):
http://forum.brighthand.com/showpost.php?p=1779068&postcount=45
The really odd thing is they are perfectly happy to do this with an unlocked, unbranded phone, where they make no money on the phone, but they will not let you do this if you buy the phone from them (paying full price, no subsidy), where presumably they get some small profit. How twisted is that? 🙄
As an American living in Europe for the last 17 years (UK and Germany) I would generally agree that the concept of unlocked phones makes a lot of sense, but it does require the "SIM-Only" contract types, which are substantially cheaper than ones with mobile phones.
Unfortunately, not all is as rosy as it is in the UK. I wish I was still there when it comes to mobile phone costs.
Here in Germany, SIM-only contracts still run for 24 months, no matter what. And they are only �10 cheaper per month. So, effectively, you save a total of �240 over the time of the contract. OK, stilll better than the AT&T situation described by another poster earler, but not that good.
It still makes getting the subsidised phone more economical.
But the thing is, the phones here NEVER go for free. I'll never forget, when the N86 came out. Everywhere in the UK, free with a contract. Here, �150 with the contract.
Thank goodness I'm a high-volume customer with T-Mobile Germany, and get 50% off new handset prices. It was still acceptable at �75, but extortionate compared to other European countries network operators.