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Sprint CEO says he may drop phone subsidies in 2015


joshnys8913
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The point is that those subsidy deals are better for me, the customer.

 

Those are little more than high volume third party resellers, such as Amazon and Best Buy, using their contract commissions to "subsidize" the prices of handsets.  Elimination of those contract commissions may allow actual service prices to drop even further.  The resellers also will have to compete on something other than commissions, and that may push down device margins.

 

Regardless, no contract subsidy plans will mean no contracts.  And that is probably for the best -- as those subs who voluntarily sign two year contracts are often the most vocal in complaining about being ETF tied to services that do not live up to their expectations.

 

AJ

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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.

 

 

If we get rid of the subsidy model industry wide I don't think there is a question that hardware prices will drop. I think the question should be will we get a comparable product for a lower price.

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No subsidy will negatively impact high end sales, at least a bit.. No reason for me not to buy a new flagship phone for $200 under the current model, but if that goes away, devices like the Nexus 5 or used phones will start to look way more attractive than making monthly payments on a $700 phone. 

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Those are little more than high volume third party resellers, such as Amazon and Best Buy, using their contract commissions to "subsidize" the prices of handsets.  Elimination of those contract commissions may allow actual service prices to drop even further.  The resellers also will have to compete on something other than commissions, and that may push down device margins.

 

Regardless, no contract subsidy plans will mean no contracts.  And that is probably for the best -- as those subs who voluntarily sign two year contracts are often the most vocal in complaining about being ETF tied to services that do not live up to their expectations.

 

AJ

Wouldnt this affect Brightstar ? I know they are the parent company of all Target mobile. And they are trying to expand Target mobile with actual target stores. This would put a huge dent in that. It could end a huge deal between Target and Brightstar. I think full subsidized plan removal is two years out. Enough time to work out small kinks like this.

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No subsidy will negatively impact high end sales, at least a bit.. No reason for me not to buy a new flagship phone for $200 under the current model, but if that goes away, devices like the Nexus 5 or used phones will start to look way more attractive than making monthly payments on a $700 phone. 

 

Doesn't seem to impact the 2.3 million folks who jumped onto T-Mo.

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Doesn't seem to impact the 2.3 million folks who jumped onto T-Mo.

How many of those had phone usable on the network? Were all 2.3 million on their EIP? Those people can buy a bigger variaty of phones than Sprint customers can. If every device available was CDMA / GMS capable then it would be different for sprint.

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How many of those had phone usable on the network? Were all 2.3 million on their EIP? Those people can buy a bigger variaty of phones than Sprint customers can. If every device available was CDMA / GMS capable then it would be different for sprint.

Most phones are required to be CDMA enabled for 911 emergencies...Sprint's white listing specific devices are the problem.

 

Sent from my LG-LS980

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Most phones are required to be CDMA enabled for 911 emergencies...Sprint's white listing specific devices are the problem.

Sent from my LG-LS980

Exactly, until they accept every CDMA phone sold in the US that has proper Band class frequencies, then this can hurt them. The benefit of the tmobile is you aren't forced to get either a used phone or Easy pay as his thread talks about. Or that you pay full price. You can buy a cheap prepaid phone if that is what suits you, and they have a wider selection than Sprint, unfortunately. Yet this could open the market for people to buy a cellular tablet, and a less high end smartphone. There is just too much that can go wrong with this.
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How about the fact that Sprint's biggest foray into "bring your own device", the Sharp Aquos, has two models, one locked to Sprint postpaid ($240) and one locked to Sprint pre-paid ($150)?

 

Super ridiculous.

It's one model, two separate white lists. But I get your point. And I...agree

 

I know why they're doing this. Because they are slightly subsidizing the cost for the Prepaid brands. That device is almost $100 cheaper. They don't want people scooping up the phone with a huge discount on a prepaid plan and then go in and activate it on a Sprint account. Especially an existing Sprint account.

 

However, I think they a should have sold it for the same price on Sprint prepaid and postpaid. Let the device go wherever it goes. Even it was $249 on prepaid, that is still a great deal. Even though a lot of Prepaid options are less expensive, they are for inferior devices.

 

Customers are just going to be confused constantly. And the used device market of these is going to be crazy with a lot of pissed off sellers and owners. This was not a well crafted idea, IMO.

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It's one model, two separate white lists. But I get your point. And I...agree

 

I know why they're doing this. Because they are slightly subsidizing the cost for the Prepaid brands. That device is almost $100 cheaper. They don't want people scooping up the phone with a huge discount on a prepaid plan and then go in and activate it on a Sprint account. Especially an existing Sprint account.

 

However, I think they a should have sold it for the same price on Sprint prepaid and postpaid. Let the device go wherever it goes. Even it was $249 on prepaid, that is still a great deal. Even though a lot of Prepaid options are less expensive, they are for inferior devices.

 

Customers are just going to be confused constantly. And the used device market of these is going to be crazy with a lot of pissed off sellers and owners. This was not a well crafted idea, IMO.

 

Yeah the used market is going to be a nightmare... At least before they introduced Sprint Prepaid it was easy enough to differenciate between Boost and Sprint.

 

I also understand why they want two price points, but someone should have vetoed that idea. Should have just picked $199 for all sales points. The pennies in extra revenue will be lost on unhappy customers and returns.

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Most phones are required to be CDMA enabled for 911 emergencies...

No, they are not. Handsets must merely be capable of connecting to any compatible cell site for calling emergency services. A GSM/WCDMA phone must be capable of connecting to any tower that offers GSM/WCDMA for that purpose, and any CDMA phone must be capable of connecting to any tower that offers CDMA for that purpose, too.

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No subsidy will negatively impact high end sales, at least a bit.. No reason for me not to buy a new flagship phone for $200 under the current model, but if that goes away, devices like the Nexus 5 or used phones will start to look way more attractive than making monthly payments on a $700 phone. 

 

 

FCC is the one to blame for all the mass in US market.

In many country, the spectrum was assigned in a much better way. So telecoms sell service and third parties sell phones. And phones can switch network by just switching sim card. In US, phones are locked to certain network when they were manufactured.

 

Even ATT/TMOBILE phones can switch to each other's networks, but Verizon/Sprint won't.

 

All in all, FCC did a great job in last decade.

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FCC is the one to blame for all the mass in US market.

In many country, the spectrum was assigned in a much better way. So telecoms sell service and third parties sell phones. And phones can switch network by just switching sim card. In US, phones are locked to certain network when they were manufactured.

 

Even ATT/TMOBILE phones can switch to each other's networks, but Verizon/Sprint won't.

 

All in all, FCC did a great job in last decade.

 

And the US wireless market is unlike that of any other country -- historically, geographically, demographically, and economically.  So, your comparisons/criticisms do not hold much water.

 

AJ

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