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Sprint CEO says he may drop phone subsidies in 2015


joshnys8913
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Again that goes back to the rep. I have seen it done and have used his line to explain it to people in personal circles and it works. Once people understand that they always paid for the phone, it was just hidden in the plan they get it. People aren't stupid they are just ignorant and that is where education comes in and from what I have seen from Att their reps do a great job.

Apparently, from what I could catch from their conversation, they were paying the same price per month at their old carrier with subsidy, so they decided not to switch.

 

 

Sent from Josh's iPhone 6+ using Tapatalk

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I must be missing something here.  The math was very clear to me.  My fiancee's sister signed up for the Sprint unlimited plan in August, and the two options were basically the same, except for price:

 

Unlimited My Way with subsidized phone:  $80/mo plus $100 up front for the phone (after $100 rebate).

 

New Unlimited plan with Easy Pay phone:  $60/mo plus $27/mo for the phone with $0 up front for the phone.

 

It's $7 more per month for the new plan, which means that over the 2-year life of the contract, you pay $2020 for the subsidized plan (when you add the $100 in) and $2088 for the new plan.  Sure, the bill drops to $60/mo after the two years, but by then, it's time for a new phone anyway, and you're back on the higher rate.

 

My fiancee and I are on one of the new Family Plans together as of August and I did similar math and also wound up on the subsidized plan and not Easy Pay because it came out to be less.  I must be missing how Easy Pay is cheaper and better for me than the subsidy.

 

- Trip

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And that is not going to happen for CDMA2000 from the so called GSM operators, who act as if they are god's gift to wireless consumers.  T-Mobile, for example, wants VZW and Sprint variant devices to support 3GPP standards and be domestically unlocked.  But by no means will T-Mobile turn around and ensure its variant devices support 3GPP2 standards.  In other words, device portability is a double standard for those holier than thou GSM operators.

 

Of course there's only like a half-dozen major carriers left in the world that are still actively using 3GPP2 for voice and legacy data, so we're getting to the point that supporting 3GPP2 is an additional cost that manufacturers are choosing not to incur.

 

Plus, even in the old days when 3GPP2 was a bigger share of the market, all the "big boys" locked out devices that weren't carrier approved. Even today both Verizon and Sprint only allow whitelisted devices on their networks, and there's no evidence Sprint plans to drop the whitelisting requirement when it starts offering all its devices unlocked next year.

 

The proliferation of boutique bands for 3GPP isn't going to help matters, particularly if 3GPP lets 600 MHz banding end up as absurd as 700, 800, and 1900 are now, but at least in a few years when VoLTE is widespread we can finally kiss the need for 3GPP2 support in handsets goodbye (whatever its technical merits, it's a dead-end technology path and everyone knows it).

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For the zero down argument youvhave to pay sales tax up front, plus if you are on ASL you pay a good chunck plus sales tax so sprint isnt out more money if you leave. For example I am ASL and a new phone on Easy pay (gs5) would cost $199 + full price sales tax up front, compared to going to target or bestbuy and getting it sub $99. Out the door cost for alot of customers will not be $0 + tax due to credit requirements.

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Of course there's only like a half-dozen major carriers left in the world that are still actively using 3GPP2 for voice and legacy data, so we're getting to the point that supporting 3GPP2 is an additional cost that manufacturers are choosing not to incur.

 

Plus, even in the old days when 3GPP2 was a bigger share of the market, all the "big boys" locked out devices that weren't carrier approved. Even today both Verizon and Sprint only allow whitelisted devices on their networks, and there's no evidence Sprint plans to drop the whitelisting requirement when it starts offering all its devices unlocked next year.

 

The proliferation of boutique bands for 3GPP isn't going to help matters, particularly if 3GPP lets 600 MHz banding end up as absurd as 700, 800, and 1900 are now, but at least in a few years when VoLTE is widespread we can finally kiss the need for 3GPP2 support in handsets goodbye (whatever its technical merits, it's a dead-end technology path and everyone knows it).

600MHz banding is up to the FCC. Depending on how many blocks are created, the 3GPP may be forced to create more than one band class because of the varying duplexes. That being said, the FCC already mandated full interoperability across the entire band. If it works out to be 1, 2, 3, or more band classes, they all have to be supported on every 600MHz capable device.

 

As for supporting 3GPP2 by GSM operators, it doesn't make a lot of sense to do that. For one, that automatically locks them down to Qualcomm, which is not something anyone wants (a large part of what makes 3GPP-only devices more cost-effective is the huge number of options for modems and SoCs). While most devices do use Qualcomm in the U.S. now, it's unlikely that it will remain the case going forward. The next generation of GSM/WCDMA/LTE modems and SoCs will be ready in time for the 2015 and 2016 device cycles. We're already starting to see alternative modems being used in devices again (Icera on Nexus 9, Intel on Galaxy Tabs and Padfone, etc.).

 

A final note on this: 3GPP2 has been winding down operations for the last 18 months. Most "members" don't even participate much (if at all) anymore. The CDG dissolved itself last year and re-established itself as the "MDG" in June, focused on migrating 3GPP2 operators to 3GPP technologies.

 

When Verizon Wireless removes CDMA mandate in the summer/fall 2015 requirements, we'll see CDMA device costs shoot up dramatically as Verizon winds down CDMA procurement. This is when we'll start seeing huge problems for the remaining CDMA operators in the US.

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I must be missing something here.  The math was very clear to me.  My fiancee's sister signed up for the Sprint unlimited plan in August, and the two options were basically the same, except for price:

 

Unlimited My Way with subsidized phone:  $80/mo plus $100 up front for the phone (after $100 rebate).

 

New Unlimited plan with Easy Pay phone:  $60/mo plus $27/mo for the phone with $0 up front for the phone.

 

It's $7 more per month for the new plan, which means that over the 2-year life of the contract, you pay $2020 for the subsidized plan (when you add the $100 in) and $2088 for the new plan.  Sure, the bill drops to $60/mo after the two years, but by then, it's time for a new phone anyway, and you're back on the higher rate.

 

My fiancee and I are on one of the new Family Plans together as of August and I did similar math and also wound up on the subsidized plan and not Easy Pay because it came out to be less.  I must be missing how Easy Pay is cheaper and better for me than the subsidy.

 

- Trip

Currently with phone prices being so high, going with monthly installments plus service will generally be more expensive for the consumer compared to the previous subsidy model, at the same time though, going with the non subsidy model will be a lot less costly for sprint(and any other carrier) and it wipes out quite a bit of debt on their balance sheet.  So the real issue here is that your monthly payment increasing is directly related to what phone you want.  If you wan't a new flagship phone that bad then you will have to pay the price for it, simple as that. If you have an issue with the amount of the installment payments then your issue will be with the OEM and not the carrier.  In your example, if you did the math using a nexus 5(which had top of the line specs when it was released) would it not be cheaper than your current plan?  Now if all the carriers go all in with the subsidy model it will basically force the hardware OEM's to compete more on a direct level with each other which could cause the price of hardware to potentially drop.  I mean seriously, the price of smartphones are just way to high.  Your typical flagship costs about $200 to maybe $250 per unit to manufacture but they all retail for $600 to $900? That is just ridiculous.  

 

Now I will admit that I have 4 lines and I am still on one of the older plans and its by far cheaper than what I would be paying if I was on one of the current plans but if sprint says hey, times up and they force me to switch then I won't be mad at them at all because I have an understanding of why things are the way they are.  

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Currently with phone prices being so high, going with monthly installments plus service will generally be more expensive for the consumer compared to the previous subsidy model, at the same time though, going with the non subsidy model will be a lot less costly for sprint(and any other carrier) and it wipes out quite a bit of debt on their balance sheet.

 

Some of the added expense comes from "unlimited" data, too.  Expect those "unlimited" data prices to keep going up.  Those who wish to save money with non subsidy plans need to examine their data usage, possibly opt for lower cost data tiers.

 

AJ

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If you wan't a new flagship phone that bad then you will have to pay the price for it, simple as that. If you have an issue with the amount of the installment payments then your issue will be with the OEM and not the carrier.  In your example, if you did the math using a nexus 5(which had top of the line specs when it was released) would it not be cheaper than your current plan?

I don't see the Nexus 5 on the website, so I can't do that math right now. But I did the math on my fiancee's Moto X which had been released a full year earlier and that also came out cheaper on the contract.

 

Now if all the carriers go all in with the subsidy model it will basically force the hardware OEM's to compete more on a direct level with each other which could cause the price of hardware to potentially drop.  I mean seriously, the price of smartphones are just way to high.  Your typical flagship costs about $200 to maybe $250 per unit to manufacture but they all retail for $600 to $900? That is just ridiculous.

You bolded and underlined the key word. You have much more faith in the market than I do.

 

Now I will admit that I have 4 lines and I am still on one of the older plans and its by far cheaper than what I would be paying if I was on one of the current plans but if sprint says hey, times up and they force me to switch then I won't be mad at them at all because I have an understanding of why things are the way they are.

I'm not mad at them or anything like that. What I'm saying is the way the pricing is currently structured, as best I can tell, Sprint is asking people to take an increased price to use Easy Pay and I'm not entirely sure what the benefit is to Easy Pay for the customer.

 

- Trip

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I don't see the Nexus 5 on the website, so I can't do that math right now. But I did the math on my fiancee's Moto X which had been released a full year earlier and that also came out cheaper on the contract.

 

 

You bolded and underlined the key word. You have much more faith in the market than I do.

 

 

I'm not mad at them or anything like that. What I'm saying is the way the pricing is currently structured, as best I can tell, Sprint is asking people to take an increased price to use Easy Pay and I'm not entirely sure what the benefit is to Easy Pay for the customer.

 

- Trip

The price of the nexus 5 16gb is $350 and yes the potential is there but to tell you the truth I have almost zero faith in the market when it comes to prices dropping on hardware, if it does happen it definitely won't be anytime soon thats for sure.  As for your last point, like I said previously, with all things being equal the net effect will be that consumers will be paying slightly more for non subsidized devices and service compared to subsidized plans.  The up front benefit would be to the carriers and if OEM's stop killing us with 300% markups then it will benefit us as well.

 

Also, when you think about it, if you are not the kind of person that has to have a new flaghsip phone right when it comes out then these plans are awesome.  If someone is rocking an older phone and wanted to get something newer like a g3, you can get one in excellent condition for $350 on ebay versus going to the carrier and paying twice the price for the same thing.

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I don't see the Nexus 5 on the website, so I can't do that math right now. But I did the math on my fiancee's Moto X which had been released a full year earlier and that also came out cheaper on the contract.

 

- Trip

16gb nexus 5 is 350 off contract. Which comes out to be ~$14.59 a month for 24 months abiding by standard two year upgrade cycle. Compared to a my way plan (which has a 27 dollar a month subsidy baked into it I believe) the unsubsidized plans are cheaper if you plan on buying an n5.

 

It seems like I'm one of the few who wished they had no subsidy plans back in January when I switched over. I'd have saved a couple hundred bucks this year if they had[emoji38].

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Last week I went to Sprint for something and there was a family of 4 porting in. As soon as they found out they had to pay installment billing for their phones, they had a fit and walked out. It's a shame too. In the end, people really don't understand and never will until subsidized pricing is gone forever. Then hopefully we will finally have lower pricing on flagship phones, but that may take time to happen.

 

 

Sent from Josh's iPhone 6+ using Tapatalk

 

Can't wait to see the look on their face when they go to T-Mo.

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What if the phones are on sale by Amazon or Best Buy or Target and you're paying $00.00* in store and an additional 00.00 over two years? And Target throws in a $50.00 gift card?

 

 

*In California you still pay tax on the full value of the phone.

 

That's a lot more interesting than "wait, you're telling me I have to pay $27.12 on TOP of the service cost....PER PHONE, every month!?!?"

 

Maybe I havent been paying attention, but I see a lot more competition and sale pricing on the subsidized phones than the easy-pay model. I always buy a top of the line phone and Ive never payed more than 49.99 due to sales.

 

But those are subsidy plan prices for the phones. What happens when those offers cease to exist? 

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Can't wait to see the look on their face when they go to T-Mo.

I think there were on AT&T, and when 2 yr contracts are done away with there, they are in for a big surprise!

 

 

Sent from Josh's iPhone 6+ using Tapatalk

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But those are subsidy plan prices for the phones. What happens when those offers cease to exist? 

Not only that but in the event you need to get out of contract then the etf's are considerably higher when bought from third parties.

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T-Mobile's billing system will attempt to provide a discount to match the pricing of the overall account within $1-2 per month if it had to rise, or choose an option that would drop the price radically, and it would attempt to match plan configurations to get as close as possible to a Simple Choice plan. It would then notify you of the upcoming change. Depending on how the system calculates your configuration and situation, you'll be given a Simple Choice Classic or Simple Choice Value plan.

 

Originally, you always got Simple Choice Classic (which is the same as Simple Choice Value, except JUMP and EIP aren't available because you have subsidy instead), though now you may get Simple Choice Value and an even more substantial discount to bring it below your old pricing with the subsidy cost factored out.

 

At this point (with the newer billing system), it may just default to Simple Choice Value now.

 

So what would those existing customers lose their subsidy when upgrading? Essentially getting nothing for signing a contract?

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Easy pay isn't made for people who are looking to pay less every month. It's made for people who don't want to spend $50 to $500 up front when they get a new device. It's for the people who like to finance things, rather than have to pay up front.

 

-Anthony

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I think there were on AT&T, and when 2 yr contracts are done away with there, they are in for a big surprise!

 

 

Sent from Josh's iPhone 6+ using Tapatalk

 

Rather, when subsidy discounts are removed.

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Easy pay isn't made for people who are looking to pay less every month. It's made for people who don't want to spend $50 to $500 up front when they get a new device. It's for the people who like to finance things, rather than have to pay up front.

 

-Anthony

 

There are ancillary effects as well though. Having a consumer realize that the piece of electronics in their hand is worth $700 and should be treated as such is a shock for those think their fancy phone costs only $50 or so.

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A quick glance at their site, looks like you can pay $50 for 3GB of LTE, or $60 for 10GB of LTE. And buy your phone unless you have a compatible device.

Last time I checked the speeds are limited to 8mbps also. Which is more than enough but he won't be having any ePenis contest.

 

Sent from my Nexus 5

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Last time I checked the speeds are limited to 8mbps also. Which is more than enough but he won't be having any ePenis contest.

 

Sent from my Nexus 5

 

Makes sense as well.

 

Just from a standpoint of threatening to leave, I can't see the incentive. Unless the network is truly unusable, which in my experience could be in some spots, things work just fine.

 

Case in point.

 

I was traveling to south Jersey over the weekend, and streaming Pandora on my wife's phone. We didn't come across any interruption in music for 90% of the trip, and that was acceptable to me. When I got to my destination, I saw that inbuilding coverage was weak at best, but I had my GS5 and WIFI calling, so I was able to use that.

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