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Comment by smackfu | Hacker News Reader

Are locked phones really unsubsidized? Not $200 subsidy, obviously, but maybe $50 or $100, considering that Virgin expects you to use it with a $30+ monthly plan and would treat it as a customer acquisition cost.

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As I understand subsidized vs. unsubsidized, yes it is. I can buy the phone without entering into a contract. I can terminate service with VM after 30 days. I can sell the phone to someone else who can choose to buy service from VM or not.

True it isn't unlocked, but I'm not aware of anyone saying unsubsidized == unlocked.

I work for Vodafone (Australia) and we definitely subsidise our locked phones. We charge a $75 (first six months)/$25 (thereafter) unlocking fee to cover the subsidy costs.

Given that the subsidy provided by the carrier is funded by the monthly contract payment of the customer, it probably isn't worth splitting hairs here.

It is worth splitting hairs because AT&T and Verizon are guaranteed to either make $75+/mo (it was $110 for my minimal minutes plan) for 2+ years OR a $200+ cancellation fee to make up for the cost of the phone.

You can buy a Virgin mobile phone and never activate it. You can stop paying without penalty after your first month. That's unsubsidised.

OTOH, Virgin USA may still be subsidizing it (by charging below cost), and just willing to take a loss if you never activate it. Since it only works on the Virgin network anyways, this isn't a risky gamble.

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