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Carriers and Stealth Price Hikes.


gangrene

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The new practice of eliminating the cheaper 450/500 minute tiers that most consumers choose and forcing new & renewing customers into the sole remaining & much higher priced unlimited minute tiers.

 

Most people don't want, use, or need unlimited minutes yet people on other carriers are now being forced to pay for them.

 

Verizon did it first.

T-mobile followed them and did it today.

How long until Sprint & AT&T follow their lead?

Edited by gangrene
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The new practice of eliminating the cheaper per-kb tiers that most consumers choose and forcing new & renewing customers into the sole remaining & much higher priced unlimited data tiers.

 

Most people don't want, use, or need unlimited data yet people on other carriers are now being forced to pay for them.

 

FTFY

 

Same thing that always happens. It happened with data years ago, now it's happening with minutes. Actually slightly different this time, not minutes and data are just switching spots because people don't talk anymore, they use the Internet instead so that's where money on the overage charges can be made.

 

People like unlimited because they don't have to worry about it, regardless of their real usage. It's all marketing.

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The key difference here is that consumers actually want unlimited data and are generally very protective of it.

 

Consumers primarily use their phones for the data capabilities and texting(including different data-based messaging services) now.

 

People are using less minutes, talking less and less.

 

Its an inherently dishonest move, because its designed to force consumers to pay more for the same minutes that they are currently using. People being forced into this higher tier aren't going to start talking more, the genuine chatterboxes that are few and far between were already on unlimited minutes.

Edited by gangrene
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I have noticed that based on sales numbers and reported numbers for the big carriers in the last few years, there has been an acceptance of cost of cell phone ownership. Customers have grown accustomed to paying more for their phones and monthly services, and while the minority of those customers complain and move towards a lower cost solution, the vast majority stick to it, and accept that it is part of the cost of living.

 

Consider the price of home internet services. When I first ordered Verizon DSL, I was paying $50 a month, which lowered down to $35, before rising again. As Verizon started ramping up their FiOS buildout, they raised the price of DSL, even for customers who were not in a FiOS area. They are now offering a triple play bundle for $85 a month for 60mbps downlink speeds, but after a year or so when the bonuses expire, the price will shoot up to over $150. Now, I can either switch to Cablevision, which is another headache, or stay with Verizon, and shift money around (stop buying random Xbox games).

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Its called a value proposition. They're giving you something "unlimited" to ease you into accepting less than unlimited data.

 

In a sense, Sprint pioneered this "more minutes than you could ever use" play. When Hesse was new to Sprint , one of his "nukes" was the "Simply Everything" plans, offering more minutes on a family plan than most families would ever use. He upped the proposition when he added "Anymobile Anytime". For years, Sprint family plan customers in older lower minute plans complained about being 'forced' to buy 1500 minutes and begged for a lower minute, cheaper option. The truth? Sprint never wanted to sell anyone a family plan at a lower price point... . and having a conversation about the "value" of 1500 minutes "just in case" gave them something to talk about.

 

Only a matter of time before Sprint's plans are revisited. I would guess after the Softbank transaction is complete... they won't want to mess with ARPU before thats over.

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Its called a value proposition. They're giving you something "unlimited" to ease you into accepting less than unlimited data.

 

In a sense, Sprint pioneered this "more minutes than you could ever use" play. When Hesse was new to Sprint , one of his "nukes" was the "Simply Everything" plans, offering more minutes on a family plan than most families would ever use. He upped the proposition when he added "Anymobile Anytime". For years, Sprint family plan customers in older lower minute plans complained about being 'forced' to buy 1500 minutes and begged for a lower minute, cheaper option. The truth? Sprint never wanted to sell anyone a family plan at a lower price point... . and having a conversation about the "value" of 1500 minutes "just in case" gave them something to talk about.

 

Only a matter of time before Sprint's plans are revisited. I would guess after the Softbank transaction is complete... they won't want to mess with ARPU before thats over.

 

Even before that, Sprint had offered what they called "Fair and Flexible" plans, which allowed customers to avoid expensive overage charges by simply buying a $5 bucket of minutes. This was created to compete with the Rollover minute value prop that Cingular offered.

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The new practice of eliminating the cheaper 450/500 minute tiers that most consumers choose and forcing new & renewing customers into the sole remaining & much higher priced unlimited minute tiers.

 

Most people don't want, use, or need unlimited minutes yet people on other carriers are now being forced to pay for them.

 

Verizon did it first.

T-mobile followed them and did it today.

How long until Sprint & AT&T follow their lead?

 

Sprint has already said they are going to hike prices in 2014.

 

T-Mobile did change their price plan, but at least the tremendously valuable $30 for 5GB data/unlimited message/100 minute plan is still available... so I don't really see what you mean that T-Mobile did that. They left those plans in place.

 

Considering the heavy investment going on in the wireless world, do you expect prices to go down?

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Sprint has already said they are going to hike prices in 2014.

 

T-Mobile did change their price plan, but at least the tremendously valuable $30 for 5GB data/unlimited message/100 minute plan is still available... so I don't really see what you mean that T-Mobile did that. They left those plans in place.

 

Considering the heavy investment going on in the wireless world, do you expect prices to go down?

 

I believe the speculative price hike conversation happened before the SoftBank announcement. In my mind, SoftBank will not be eager to raise prices when they enter the market.

 

Robert via Nexus 7 with Tapatalk HD

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I believe the speculative price hike conversation happened before the SoftBank announcement. In my mind, SoftBank will not be eager to raise prices when they enter the market.

 

Robert via Nexus 7 with Tapatalk HD

 

Yup, I think for a while Dan has said that in Sprint's current state, they've pushed through all of the price increases they can. Once the network is better (superior?) to verizon/AT&T, they'll be able to justify higher prices to consumers.

 

Logically, it makes sense - however with every price increase, the internets will be upset.

 

On a personal note - the "reinvigorated" t-mobile might make raising prices a bit harder in 2014 than they might think. I suspect sprint will take a very close look at what T-Mobile is doing, and do something similar (just as AT&T followed Big Red into the shared data world).

 

At the end of the day, there has to be a pay-off for all of this capital spending.

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It's just this leveling game among the big carriers that gives the MVNOs the space in which to operate. While people may not be beating down their doors, this "conformity at the top" encourages more varied service offerings and flexibility among the MVNOs and smaller operators. There are some interesting options out there if you're willing to bypass the big four.

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It's just this leveling game among the big carriers that gives the MVNOs the space in which to operate. While people may not be beating down their doors, this "conformity at the top" encourages more varied service offerings and flexibility among the MVNOs and smaller operators. There are some interesting options out there if you're willing to bypass the big four.

 

I guess I just don't see the value in T-mobile carrying fifty different MVNOs when they already offer self-branded pre-paid. It just seems exceedingly dangerous to me that T-mobile and Sprint would try to reach pricing parity Verizon or AT&T considering the lesser coverage of T-mobile, and how lackluster Sprint serve is going to be until Network Vision is completed.

 

Don't thinks like Straight Talk and Simple Mobile running on their network just cannibalize their business?

Edited by gangrene
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Don't thinks like Straight Talk and Simple Mobile running on their network just cannibalize their business?

 

To a degree, but thats like saying why should any company operate both wholesale and retail divisions? I would say that MVNOs allow them to indirectly expand their business into market segments where they may not have much of a presence otherwise.

 

As an example, when my contract with AT&T expired, I found a (Sprint) MVNO that had a service model that better matched my needs. Would Sprint itself have gotten my business? Based on my experiences with them and a corporate proved phone years ago, probably not.

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I believe the speculative price hike conversation happened before the SoftBank announcement. In my mind, SoftBank will not be eager to raise prices when they enter the market.

 

Robert via Nexus 7 with Tapatalk HD

I have to agree with this. Sprint won't really need to ask for more money because of any money issue. SoftBank deal will take care of that.
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I have to agree with this. Sprint won't really need to ask for more money because of any money issue. SoftBank deal will take care of that.

 

Shareholders always appreciate when their investing company brings in more revenue. After NV is done, appropriate returns will be expected.

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Shareholders always appreciate when their investing company brings in more revenue. After NV is done, appropriate returns will be expected.

 

Yes, but 70% of those shares will belong to SoftBank. That's a game changer.

 

Robert via Nexus 7 with Tapatalk HD

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My point still stands, investors want returns.

 

And with a 30% minority, they will not be listened to if SoftBank feels the market will not support it. It will only be a matter of time until SoftBank buys out the entire company and takes it private. And they will just accelerate that timeline if investors get mouthy.

 

They cannot shoot themselves in the foot competitively just because investors want returns in the short term. SoftBank will make decisions on a long term investment approach, other minority investors interested in short term gains be damned.

 

Robert via Nexus 7 with Tapatalk HD

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And with a 30% minority, they will not be listened to if SoftBank feels the market will not support it. It will only be a matter of time until SoftBank buys out the entire company and takes it private. And they will just accelerate that timeline if investors get mouthy.

 

They cannot shoot themselves in the foot competitively just because investors want returns in the short term. SoftBank will make decisions on a long term investment approach, other minority investors interested in short term gains be damned.

 

Robert via Nexus 7 with Tapatalk HD

 

Generally buyouts are good for investors cause you get an instant return in very short order, however I want to ride the wave that NV will bring so as a shareholder I would want to have the stock for a long time.

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Id bet large sums of money that Sprint will eventually follow Tmbole by doing something like this:

 

1) Raise prices by $10

2) Offer "new! save money!" by allowing you to lower your bill $10 a month in return for a 2GB cap (with throttling above it)

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This data metering discussion brings us all back to where we were years ago with voice minutes.. As pointed out, the current family plans make you believe that you are not using all your minutes because of the free mobile-mobile and nights/weekends that don't use any.. In analyzing my family plan with myself and 3 adult children and 1 teenager, only one of the phone lines has tons of voice minutes.. the others have a limited amount actually used during a month.. On the data side, I haven't seen any of my lines go over 2GB's in a month... The only issue is roaming data because of being on school campi that either are just off the Sprint network or the signal is no good.. Also, when going to places in the mountains.. No Sprint Coverage.. This last month was a particularly high one for roaming.. Anyway... I did a little math on the new T-Mobile plans and found them interesting.. For $120 for two lines with unlimited data, not bad.. the other 3 lines would be $90 total.. The other difference would be the cost of the phone which would not be subsidized.. By my math, it all seems about the same..

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The only time you will save money with non-subsidized plans, is if you keep your phone forever and/or buy cheap/used phones.

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The only time you will save money with non-subsidized plans, is if you keep your phone forever and/or buy cheap/used phones.

 

I am guessing that third party sellers will offer rebates on phone, I'm thinking Amazon and Best Buy. They can cut deals with Manufacturers and move volume of phone that can be used in any carrier...

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move volume of phone that can be used in any carrier...

 

maybe if we can get ubiquitous and *good* world phones, that could happen. But until we get to a tipping point of where everyone has a common/popular single phone that can handle any particular carrier, this is still a dream.

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maybe if we can get ubiquitous and *good* world phones, that could happen. But until we get to a tipping point of where everyone has a common/popular single phone that can handle any particular carrier, this is still a dream.

 

LTE will that more feasable...

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