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It varies country to country. That was the norm for Spain but has since changed, now you get two contracts, one for the service and another for the phone financ
by Adirael 13y ago
It varies country to country. That was the norm for Spain but has since changed, now you get two contracts, one for the service and another for the phone financing.
I pay 25/mo for my iPhone plus an 8/mo data plan. I don't do much calls but they're 8/c minute IIRC. I can move from a plan to another or cancel the data but the 25/mo will stay there until the phone it's paid.
It was 50€ cheaper to buy it this way than to pay full retail price.
- erichurkman 13y ago> It was 50€ cheaper to buy it this way than to pay full retail price. What's the reasoning behind that for the phone vendor? That seems odd.
- PeterisP 13y ago1) There is some "lock-in" even without lock-in - some phone subsidies work even if people can leave because they don't leave that much anyways; think of it as advertising expense for customer acquisition. 2) There are economies of scale (order size) and synergies (sell phones at the same office you already have for contract sales) that can mean that $RANDOM_TELECOMPANY has significantly lower costs than $RANDOM_PHONE_RETAILER and can simply outcompete them on price.
- tsotha 13y ago>There is some "lock-in" even without lock-in - some phone subsidies work even if people can leave because they don't leave that much anyways; think of it as advertising expense for customer acquisition. Yes. Carriers in the US lose, literally, billions of dollars on the iPhone because they've calculated the cost of acquiring a customer is a few hundred bucks, on average, so if subsidizing a phone buys you customers it's worth it. Personally, I think they've gone overboard, but then again I'm not in the front office. http://www.latimes.com/business/money/la-fi-tn-verizon-on-hook-for-billions-in-missing-iphones-sales-report-states-20130710,0,7933563.story http://www.latimes.com/business/money/la-fi-tn-verizon-on-ho...