5 ms·

Selling phones with plans for a subsidized (when someone can't count the total cost) is one of the biggest multi-billion dolar "scams" I've seen for a while. He

by jsf666 11y ago

Selling phones with plans for a subsidized (when someone can't count the total cost) is one of the biggest multi-billion dolar "scams" I've seen for a while. Here (Europe) buying a pre-paid card and a phone separatly is the most cost effective option, isn't it the same in the States?

jedanbik 11y ago
It is cheaper - I'm saving $1000 bucks on my iPhone over the course of two years, just by buying it unlocked and on a cheaper plan. I can use it in other countries as well, just a matter of swapping the SIM card. Only downside is that my network provider won't replace my phone if something were to happen to it, but I'd imagine there are third party insurance providers in this space. I think there are a few reasons why companies like Verizon are so big in the U.S.: they have a good network, they offer plenty of family plans, and they will replace your phone for what seems like subsidized rate under various conditions. Oh, and they advertise constantly. But not being able to use my phone out of the country? Very limiting. Why would I pay more for that handicap as an individual enrollee?
meesles 11y ago
It would depend on your use I suppose? I always found that I could never live off a prepaid system because I would blow through the data too fast.
- lorenzhs 11y ago
  you can get a 5GB prepaid plan as well, it's something like 15€ ($17) per month (in Germany, which is among the more expensive countries regarding mobile phone tariffs). And when you go over your cap, your speed gets reduced to 64kbit but you don't pay extra. Some prepaid providers then allow you to "reset" your data cap for another 3-5€.
- DanBC 11y ago
  Giffgaff offer unlimited phone data (no tethering) for £15 per month.
  - IkmoIkmo 11y ago
    Which one? https://www.giffgaff.com/goodybags/15pound-goodybag https://www.giffgaff.com/goodybags/15pound-goodybag Can only find that, 15 pound plan by giffgaff, 4gb limit on data and a 10p charge per minute for calling UK landlines. Then there's their 'always on' which isn't unlimited, it's 6gb which to me is practically unlimited. After the 6gb your speeds get reduced to a fraction (which I like, and up to 6gb you can tether btw). But if you look at the phone+plan deals giffgaff has, they're all slightly cheaper per month and with the phone included there's no upfront costs and it's still cheaper than buying the phone separately. It does make sense of course if you can find a new-quality, second-hand phone, at a second-hand price, or if you travel so much that any plan no matter the pricing really makes little sense in the first place.
IkmoIkmo 11y ago
> Here (Europe) buying a pre-paid card and a phone separatly is the most cost effective option, isn't it the same in the States? Where in Europe? In the Netherlands all the calculations I ran every 2 years showed anywhere from slight to major discounts for 2 year contracts paired with a phone, and that's without discounting future cash payments (or valuing money you're paying upfront, either way). It's still beneficial to phone companies because it makes phones look cheaper than they actually are ($30 a month feels more doable than $720 upfront) and so it's probably easier to sell a $30 a month cost for 2 years than selling a $720 cost even though (ignoring time value of money) they're the same. And then if you add say a $20 phone plan, it's basically: want to pay $50 a month, or $30 a month and pay $720 now? The latter is probably easier to swallow for most and easier to sell, but that's of course entirely different from being a scam. So for example, the Netherlands. Apple's shop sells the iphone for 700 euros. KPN (one of the 3 networks) has a one-time 53 euro, 2 year 54 euro plan, so 56 euros per month on average and the phone & plan is included. A similar plan with the same KPN is €32.50. Add that to the 700 euro cost of the phone over 24 months (€29) and you're at 62 euros, vs 56 euros, more than 140 euros of discount and that's without valuing the financial/convenience value of not having to pay 700 euros upfront. And this is literally the first, standard plan I looked into, no cherrypicking. (5gb a month plan, no limit calling/texting). Perhaps you could find different results but I've, purely as part of my buying decisions when I bought my own phone, ran these calculations here about every year or every two years at different carriers and it's consistent. So I'd say, it depends on the country. As for prepaid, it's absolutely horrible here in the Netherlands. It's 30c per minute for calling, 16c per text, 25c per megabyte. Not kidding. That's KPN by the way, the same that offers the above plans. That means if you call say 300 minutes per month, that's 90 euros already. And that's just a little over calling 1 hour per week. Call 30 minutes per week and it's 36 euros. Add a 700 euro iPhone and you're already well over any KPN plan you can get, and you haven't used any data or texts yet. The 5 gigabytes of data the plan has would cost you 1250 euros per month if used in prepaid. Even using just 500 megabytes per month (my plan 5 years ago) would cost you 125 euros per month, prepaid. KPN's prepaid is disproportionately shitty though, it's meant for old people really. Like my grandfather has it and he mostly just calls for cabs, emergencies etc. T-Mobile's rate in the Netherlands is more sensible, but still 5c per megabyte. A 1 gigabyte monthly data usage still costs you 50 euros, but such a 1 gigabyte plan would cost you less than 20 euros with minutes included. Prepaid here is never, ever a good option, unless you're an extremely light user like my grandfather, or someone who travels tons and doesn't return (as you can freeze plans for vacations etc).
dagw 11y ago
Here (Europe) buying a pre-paid card and a phone separatly is the most cost effective option Where? Europe is a big place. Also it depends very much on which phone you want. Certainly last time I did the math in Sweden, if you wanted a new high end phone like the latest iPhone or Samsung S6 then it was basically always cheaper to get it on a two year contract compared to paying for the phone and getting a separate equivalent plan or per-paid card. On the other hand if you wanted a sub 100€ phone or where happy with a second hand phone, then getting a phone and pre-paid card or cheap monthly plan separately is almost always cheaper.

by jsf666 11y ago

jedanbik 11y ago

It is cheaper - I'm saving $1000 bucks on my iPhone over the course of two years, just by buying it unlocked and on a cheaper plan. I can use it in other countries as well, just a matter of swapping the SIM card. Only downside is that my network provider won't replace my phone if something were to happen to it, but I'd imagine there are third party insurance providers in this space. I think there are a few reasons why companies like Verizon are so big in the U.S.: they have a good network, they offer plenty of family plans, and they will replace your phone for what seems like subsidized rate under various conditions. Oh, and they advertise constantly. But not being able to use my phone out of the country? Very limiting. Why would I pay more for that handicap as an individual enrollee?

meesles 11y ago

It would depend on your use I suppose? I always found that I could never live off a prepaid system because I would blow through the data too fast.

lorenzhs 11y ago
you can get a 5GB prepaid plan as well, it's something like 15€ ($17) per month (in Germany, which is among the more expensive countries regarding mobile phone tariffs). And when you go over your cap, your speed gets reduced to 64kbit but you don't pay extra. Some prepaid providers then allow you to "reset" your data cap for another 3-5€.
DanBC 11y ago
Giffgaff offer unlimited phone data (no tethering) for £15 per month.
- IkmoIkmo 11y ago
  Which one? https://www.giffgaff.com/goodybags/15pound-goodybag https://www.giffgaff.com/goodybags/15pound-goodybag Can only find that, 15 pound plan by giffgaff, 4gb limit on data and a 10p charge per minute for calling UK landlines. Then there's their 'always on' which isn't unlimited, it's 6gb which to me is practically unlimited. After the 6gb your speeds get reduced to a fraction (which I like, and up to 6gb you can tether btw). But if you look at the phone+plan deals giffgaff has, they're all slightly cheaper per month and with the phone included there's no upfront costs and it's still cheaper than buying the phone separately. It does make sense of course if you can find a new-quality, second-hand phone, at a second-hand price, or if you travel so much that any plan no matter the pricing really makes little sense in the first place.

IkmoIkmo 11y ago

> Here (Europe) buying a pre-paid card and a phone separatly is the most cost effective option, isn't it the same in the States? Where in Europe? In the Netherlands all the calculations I ran every 2 years showed anywhere from slight to major discounts for 2 year contracts paired with a phone, and that's without discounting future cash payments (or valuing money you're paying upfront, either way). It's still beneficial to phone companies because it makes phones look cheaper than they actually are ($30 a month feels more doable than $720 upfront) and so it's probably easier to sell a $30 a month cost for 2 years than selling a $720 cost even though (ignoring time value of money) they're the same. And then if you add say a $20 phone plan, it's basically: want to pay $50 a month, or $30 a month and pay $720 now? The latter is probably easier to swallow for most and easier to sell, but that's of course entirely different from being a scam. So for example, the Netherlands. Apple's shop sells the iphone for 700 euros. KPN (one of the 3 networks) has a one-time 53 euro, 2 year 54 euro plan, so 56 euros per month on average and the phone & plan is included. A similar plan with the same KPN is €32.50. Add that to the 700 euro cost of the phone over 24 months (€29) and you're at 62 euros, vs 56 euros, more than 140 euros of discount and that's without valuing the financial/convenience value of not having to pay 700 euros upfront. And this is literally the first, standard plan I looked into, no cherrypicking. (5gb a month plan, no limit calling/texting). Perhaps you could find different results but I've, purely as part of my buying decisions when I bought my own phone, ran these calculations here about every year or every two years at different carriers and it's consistent. So I'd say, it depends on the country. As for prepaid, it's absolutely horrible here in the Netherlands. It's 30c per minute for calling, 16c per text, 25c per megabyte. Not kidding. That's KPN by the way, the same that offers the above plans. That means if you call say 300 minutes per month, that's 90 euros already. And that's just a little over calling 1 hour per week. Call 30 minutes per week and it's 36 euros. Add a 700 euro iPhone and you're already well over any KPN plan you can get, and you haven't used any data or texts yet. The 5 gigabytes of data the plan has would cost you 1250 euros per month if used in prepaid. Even using just 500 megabytes per month (my plan 5 years ago) would cost you 125 euros per month, prepaid. KPN's prepaid is disproportionately shitty though, it's meant for old people really. Like my grandfather has it and he mostly just calls for cabs, emergencies etc. T-Mobile's rate in the Netherlands is more sensible, but still 5c per megabyte. A 1 gigabyte monthly data usage still costs you 50 euros, but such a 1 gigabyte plan would cost you less than 20 euros with minutes included. Prepaid here is never, ever a good option, unless you're an extremely light user like my grandfather, or someone who travels tons and doesn't return (as you can freeze plans for vacations etc).

dagw 11y ago

Here (Europe) buying a pre-paid card and a phone separatly is the most cost effective option Where? Europe is a big place. Also it depends very much on which phone you want. Certainly last time I did the math in Sweden, if you wanted a new high end phone like the latest iPhone or Samsung S6 then it was basically always cheaper to get it on a two year contract compared to paying for the phone and getting a separate equivalent plan or per-paid card. On the other hand if you wanted a sub 100€ phone or where happy with a second hand phone, then getting a phone and pre-paid card or cheap monthly plan separately is almost always cheaper.