Kill the Wireless Contract, Buy Your Own Phone | Hacker News Reader

Kill the Wireless Contract, Buy Your Own Phone

wsj.com

46 pointspeterkrieg74 comments

> That $199 iPhone? It really costs $650!

It's been really nice to see unsubsidized wireless become more of a thing in the US. I can't even begin to describe the confusion my family members have when I tell them that their iPhone actually cost $600-700. Their response is, "oh, no, it was only $200." It's astonishing how misunderstood this is... like saying you financed a car purchase and it only cost you the downpayment.

I was really excited when the very first iPhone launched because that one was essentially unsubsidized (or as close as us in the US had ever seen). Unfortunately, the mass consumers showed they wanted subsidized so the next generation of iPhone saw the plan cost go up and the upfront cost go down. Everybody I complained to thought I was crazy about the cost going up because all they looked at was the initial cost of the phone going down and failed to do the math at how much the increased plan cost would cost them over 2 years.

I honestly don't know where the "scam" line lies.

You've been able to pay full price for the phone and get a reduced price contract for quite a while. It's just more common for people to get a $50-$150 Android phone with that plan. Many people who get an iPhone can't afford the one-time purchase of a $650 phone but don't have a problem paying $90/month for it.

Sadly, the fact they don't have a problem paying $90/month is probably the reason they can't afford the $650.

There often isn't much in it when you compare costs (at least in the UK, when you want decent limits).

The killer is when you are on a contract and want to break it early, or forget to upgrade and keep paying your inflated rate after you have paid off the phone.

For the car analogy, it is like the car cost you $1000 up front, but you have to buy a specific brand of gas for the life of the car. Which could be a good deal, since you have to buy gas anyway, as long as that gas isn't much more expensive then other brands of gas. And if that brand is available in all the cities that you drive.

> Which could be a good deal, since you have to buy gas anyway

Is there any market where this has ever been a good deal?

For printers, mobile phones, etc. I'm not aware of a single example.

Maybe renting a flat is a model where this works, compared to repeatedly buying and selling your house whenever you move. However, maybe this just works in countries like Germany which have very good laws to protect customers/lodgers.

The question is how you see it as a good deal.

If you need to defer up front costs and facilitate it through increments then yes.

If you see it as the total cost, then it is not a good deal.

Yea, but it is more expensive. For instance, I'm paying $30/month on Page Plus, whereas the cheapest plan I can get from Verizon is $80/month.

(Though admittedly, the Verizon plan gives more data. None of the Page Plus plans give exactly 2GB of data, but the Page Plus plans at $40 and $55 straddle that amount)

if you need more data but don't care about minutes, t-mobile has a prepaid plan that is $30 for 5gb data (and throttled after), unlimited text, and 100 minutes.

That used to be the case. That iPhone really did cost you $200, because you paid $70/month (or whatever) regardless of whether you bought the thing subsidized or unsubsidized.

Now, the carriers are getting away from that model. AT&T, for example, charges you less if you bring your own phone, or buy it from them at full price. The monthly difference is almost exactly 1/24th of the subsidy.

That's good information to know for comparison -- I'm with T-mobile, and when they switched to the BYOD model, they got rid of the subsidized plans. The replacement plans look like a good deal, but it is hard to compare because plans were getting better every year anyway. And providers went from making money on voice to making money off of data.

Article doesn't mention that T-Mobile will let you buy that $650 phone in installments if your credit is good.

So you can still get that new handset and pay for it in your monthly bill, but now you have the option to pay the remainder off at any time and switch it out/sell it/change carriers/etc.

My wife used this to upgrade her 5s to the 6 Plus. By the time the 6 Plus came out, she had half the installment plan paid off, and the residual value of the 5s (sold to a private party) covered the rest.

Pretty sure that Att also offers this.

Yup, it's the AT&T Next program. I'm on it right now with my iPhone 6+, so at the end of the payments I have paid the phone off in full.

If you use Next to upgrade you are actually losing the money you pay each time you upgrade. The math works out better if you buy the phone straight up and resell it every time a new phone comes out which you want.

Given that Next is effectively a 0% interest financing plan with no prepayment penalties, it's easy to compare the market rate for your used device vs. the amount of remaining payments you still owe and make the best choice from there. (That "best choice" could be driven by financial reasons, or by convenience.)

IF you upgrade through Next. There is nothing stopping you from selling it on the market after the fact. I don't pay any more than if I had bought it unlocked, but now I have small payments with 0% interest. That's a big win.

The nice thing about Next is that you have the option. The upgrade option is a stupid option, but you don't have to take it. It's basically only there to trick suckers who can't do the math.

As do Verizon (EDGE) and Sprint (Easy Pay).

Sad to see that Ting was left out of their list of MVNOs. Ting just added GSM service, too, so they offer service on both the Sprint and T-Mobile networks. Sprint roams on Verizon, so there's no loss in voice/SMS coverage by switching.

There's a thriving used market in phones at Glyde, and Ting's refurbished phones have been great.

I've heard good things about the other MVNOs too, but haven't tried them. Decoupling from Verizon was a great financial move; as a bonus, I'm actually happy about my phone company.

(Disclaimer: I'm both a happy Ting customer and happily own a few shares in Tucows)

I was happily paying $120/mo for two phones to the "uncarrier" (T-Mobile) for the last 4 years or so, because I didn't even know what an MVNO is. I thought the Big 4 were my only options.

I just switched to Ting last month, and I can't believe it! Their billing plan is AWESOME -- you don't have to try and guess how much service you will use. Instead, however many minutes you use (combined with all phones on your account) determines which bucket you fall into (less than 100 minutes? 3 bucks), and the same for texts and data/megabytes. Less than 100 texts? 3 bucks. Less than 100 megabytes used for the month? 3 bucks. 100-500? 9 bucks. Add a base charge of $6/mo/device and my bill this month was a total of $36 for both phones.

Quite a change from giving T-mobile over a hundred bucks every month! And I love t-mobile for pioneering the no-contract plans, stellar customer service, etc -- but I switched in a heartbeat when I realized I was paying triple what I needed to! And the customer service at Ting seems to be just as good! Can't recommend them enough.

The problem with Ting is that it is not designed for people that use their devices exclusively with data, like me.

Why do you say that? I think it's perfect for that situation, because Ting allows you to set alerts or even hard limits for going over certain usages. (hard limit can be anything, even zero)

Ting will let you set your account so it is impossible for you to use minutes or text messages. (Or cap them at a certain number) That's perfect for data-only usage, isn't it?

I can't praise Republic Wireless enough - it's a wifi/cellular hybrid Motorola phone. My phone bill is $25 a month for unlimited 3G data. Was able to make/ receive calls to / from the US in Russia last summer with no issues. Paying $100 for a contract phone is insane.

Recently switched to Republic and am quite happy. I initially signed up for the 4g service, which is roughly $46/month after taxes/fees, but I'm realizing I offload over 90% of my usage to WiFi, which is making me reconsider one of the cheaper 3G plans.

I've also been shocked by how great the call quality it is (I can often make out what people talking in the background or on the radio on the other end of the line are saying), but it's probably more related to my previous phone being terrible than anything else.

I've always been surprised that contract carriers are so popular when you end up saving hundreds with pay-as-you-go, even including up front phone cost. The break-even point is frequently around a year from service start, so it's always seemed like a no-brainer to me.

I've been using Republic Wireless with the Cell/WiFi plan for $10/mo. I wouldn't even own a cell phone on one of the major carriers—I hate feeling like a hostage, when I'm a paying customer.

Ditto. For Xmas my wife and I bought republic wireless phones. My phone works great and costs 10 bucks a month. Works perfect because I'm surrounded by WiFi all the time.

Cricket Wireless is even cheaper if you are able to find other people to form a group. I am currently paying $20/month on Cricket Wireless for unlimited text/call and 2.5GB of LTE data (capped at 8Mbps). We are currently a group of 5 and our data limits/plans are independent/individual. They are owned by AT&T.

I really like Republic Wireless, but for anyone considering it: http://republic-wireless.wikia.com/wiki/The_Complete_List_of...

One benefit of an unlocked phone is being able to use a local SIM card when you travel internationally. This could be a big savings over paying roaming charges.

True.

And those US prices seem insane to me. As an example of what you can expect with prepaid operators, here's what Virgin Mobile in Poland charges:

$5.1/month buys 2GB, unlimited sms, 100 minutes $7.8/month buys 2GB, unlimited sms, unlimited talk time $16/month buys 10GB, unlimited sms, unlimited talk time.

That $16 is about $56 when you adjust for the median household income difference between Poland and the US.

I wouldn't expect my house, utilities, food etc to cost what the median prices are for those things in Poland either.

The US is a vast country to try to build 99% LTE coverage across population wise, which the US carriers managed to do. It cost a lot of money to pull that off. Labor costs, spectrum rights (thanks FCC), et al. are far more expensive in the US than Poland.

Check out what a plan costs on Swisscom, you're talking $80+ to get started. That makes sense because Switzerland has a high median household income. Nobody expects a $7 all-in phone plan in Switzerland.

Their customers also don't seem to care. AT&T and Verizon have a combined 220 million wireless subscriber lines (or so). This is pretty good evidence that they don't particularly need to lower prices, regardless of whether they can or not.

I'm not sure spectrum auctions are that big a deal, the companies are paying months of revenues for decades of license.

Verizon LTE phones are factory unlocked, which is spectacular.

Sent from my iPhone on Turkcell

In the UK, mobile operators introduced 'SIM only' contracts a few years ago, where you got a rolling monthly contract (you weren't tied in for more than a month at a time), effectively giving you the flexibility of 'Pay As You Go' but without having to bother with top-ups.

Initially, these were much cheaper than the year-long contracts, if you already had a phone. Now, however, they have little advantage over a 'standard' 2 year contract, as they've made them much more expensive (if you want a decent amount of data, which people who own smartphones do) and much less value for money on a monthly contract than a yearly contract.

Now if you 'bring your own phone' - and it's a smartphone, so you want some data, a 'SIM only' contract allows you to choose between not really saving any money, but being on a rolling monthly contract - a bit pointless unless you plan on switching providers very soon or giving up mobile phones forever - or saving having to buy a phone you don't need over 2 years, but still being locked in for a year.

All this said, I've managed to get a year's service with Vodafone UK (unlimited calls/texts, 6GB data) for £9/month effectively, due to cashback and offsetting my Spotify premium that I was paying for.

My phone (that I bought from O2 and had them unlock) is a Nokia Lumia 635, which is around £70 and is, well, 'functional'.

Really excited to see the MVNOs getting better service by licensing multiple Tier 1 networks. I'm still using AT&T on a family plan, but only because they've followed T-Mobile's strategy almost verbatim for the last year.

I grew up in Alaska (now in Colorado), and my parents in Anchorage don't have home internet. Even in Anchorage, a city with 300,000 people, $60/mo will only buy you 10Mbps of download speed with capped bandwidth, through the only cable internet service in town. Now, with AT&T's rollover data I get about 45GB of cellular data usage per month. I'm on the 30GB/mo plan, but most months we only use 15GB, so the other half rolls over. Now, when I travel to visit my folks, I can tether without any concerns. It's actually worth paying the AT&T premium to be able to tether hassle-free. AND, in Alaska the LTE is way faster than the entry-tier cable internet plans. For many people with cellular service, it might actually be cheaper to use your phone as a hotspot in Alaska than to have cable internet.

Glad to hear so many of you are having good experiences with T-Mobile and MVNOs though. I'm so psyched for the future of data access!

I had never concerned myself with cell phones since the whole "get a 'free' phone with a contract!" seemed like a total scam, and I didn't need a personal cell phone, so I let my SO "do the needful". Recently I lost my corporate iPhone, and was referred by a colleague to Cricket, which is a subsidiary of AT&T. $35/month unlimited domestic calls/texts + 1GB LTE data (with throttling, not cutoff, if the data alloc is exceeded) seemed like a great deal compared to my SO's Verizon contract deal. I can use any AT&T compat phone. Then I was informed by the Cricket salesman that a $100/month for 5 phones deal was available; we ditched the Verizon contract (paid a small penalty for doing so): 2 kids now have phones, I have 2 (1 work, 1 personal); all MotoG's ($25 ea after rebate). Recently Cricket bumped the monthly data alloc from 1GB to 2.5GB (per phone per month, same price). There may be somewhat better deals, but I'm quite pleased with the current deal, and NO CONTRACT!!! Things can only get better...

If you're willing to use an older phone, it's possible to find an iPhone 5, 5c or 5s in the $225-275 range.

I don't really understand the reasoning here: because I sign up to a long contract I expect big discounts on calls/data (more so than I could hope to find while shopping around different carriers with a phone I own). If calls/data are the same cost as it would be without signing a long contract then I expect the phone to be discounted instead!

If I could buy the phone and still get the same total cost (or even cheaper) without locking myself to a carrier for 24 months then of course I'd do that?

Not sure if it's a local/EU law or something, but total cost is always listed, and the option to buy the phone without contract is always given.

I have the "excellent" oneplus mentioned and while it is a great phone I should mention that I've had audio issues.

The issue I'm hitting up against is that even though the support is relatively good, it's all through email and appears to be from China. Days can go by before I get a response.

Now it looks like I will have to RMA, and it's taken a few weeks to get to this point. This also means I will have no phone while they wait for my return before sending out the replacement.

All in all, happy with this phone. But there's a caveat when buying from a non traditional supplier - 'virtual' support.

Just buy two shit ones.

If you can't afford to replace it, can you afford to own it? Never rely on vendor support; Motorola UK taught me that.

Two Lumia 630s here.

"If you can't afford to replace it, can you afford to own it?"

With that logic I'd own two fields with a tent in each (o; I'm not an apple fan but I do like the ability to talk to a "genius" in person.

And I guess that's the difference between REI and an ebay seller, Apple and some no name Chinese equivalent. It's the premium you pay to get the comfort in knowing there's going to be no hassles IF something goes wrong.

The build quality & specs on the oneplus is definitely that of a $600 flagship. The $300 price tag does not mean I ought to buy two to make up for the lack of support.

> Sadly, Apple doesn’t offer that sort of affordable pricing on iPhones, though you can save about $100 if you look for used models ...

Not true. Last year, I lost my iPhone in July, but wanted to wait for the iPhone6. Verizon had a deal: a refurbed iPhone 4s, unlocked, for $150. I bought that, and moved to a prepaid plan on VZW. $40/month, all in.

When the 6 came out, I turned the 4s in for a $200 rebate (and bought the 6 outright), thus coming out ahead.

One advantage of CDMA phones (like VZW) is that they also work on GSM! So you have the flexibility of using any network, with the right SIM.

I think I understand that people want to have the option to switch, but I never, myself, had any reason to do so. I mean the differences between the services different providers provide is not that much (for me) to justify the switch. Maybe that is because I am on a grandfathered unlimited plan. Over the years I have periodically (with every new iphone), reviewed other options and never found the switch compelling. Anybody knows any reason other than "just having the option" ?

The cost is a compelling reason. Last year, my spouse and I terminated our Verizon contracts, bought used iPhones on Glyde, and switched over to Page Plus Cellular. Our monthly bill dropped from $110 to $65. Factoring in the cost of the phones and the termination fee, the move will pay for itself within a year.

I think the big reason for me was cost. I cut my AT&T (3 phones) bill nearly in half (180 to 100) by switching to T-Mobile and buying a couple Nexus 5s. AT&T has become more competitive with their prices since then, so the savings is less now, but still there.

I'm a low data user that routes all of my texts through Google Voice. In a typical month, I'll use 200MB of data and 300-400MB in a particularly high usage month. Most contract plans that included data charged me ~$20-30/month for the data alone, so I wanted to switch.

I originally used T-Mobile's prepaid 100 minutes + "unlimited" data plan for $30 a month. I switched to RingPlus's 10 minutes + $0.02 per MB/minute overage plan for $2/month + data overage charges and reduced my bill to around $11 a month (this plan no longer exists -- it's 4 cents per MB now). I then switched to US Mobile on a 100 minutes + 250MB plan for $10 a month -- and their T-Mobile service gives me better coverage in my area.

By switching providers around with my personal use case, I was able to very aggressively bring my cell phone bill down. I've found being able to take the other option very valuable to me.

option to switch easily = incentive to compete.

Overseas travel can be one big reason. Overseas roaming is typically extremely expensive (T-Mobile being a notable exception to this) and having an unlocked phone means you can just pop in a local SIM card rather than farting around with workarounds or paying lots of money.

Buying a $600+ phone is a little crazy. It shouldn't be a commonplace thing. I don't want a phone I will regret landing on top of while skiing or biking or just bumping into things. It's a triumph of marketing but it makes little sense when you can get, e.g., a new moto E with LTE for $150. That's what a good smartphone, with no glaring deficiencies, should cost.

$600+ for a tablet that you keep protected in your bag is a whole other thing.

This is exactly how I roll. I will never pay more than $200 for a phone and I will never, every pay more than $200 for a tablet or any computing device that comes with a walled garden OS.

I did pay over $1,000 for a Surface Pro and I will do it again when the 4th version comes out because that's a fully capable general purpose computer that I use as a portable workstation and/or gaming rig. I paid $350 for a Dell Venue 8 Pro because it's got full Windows 8, it fits in my pocket and the battery lasts 13 hours. I can easily install Chrome with Adblock on these tablets and it's faster and easier to setup than any Android or Apple device that I've ever used because I've got way more control.

I even upgraded that little 8" tablet to Windows 8 Pro for another $100 so I could add it to my company's domain and walk around accessing every single company resource that I need with the same native apps that I use at my desk.

I've been using Virgin Mobile happily for coming on two years. $35/month for LTE on my iPhone 5s is pretty much impossible to beat. Plus, I can get tethering for $5/day if I need it while traveling.

Yes, it's Sprint, and their network isn't the best, but since I don't live in San Francisco I've rarely had problems.

I always wonder when I read about TMobile from a US-PointOfView. In Germany, TMobile is the "Verizon". I pretty much think they raise rates here in order to have money for competitive rates in new markets, but as soon as they achieve a certain marketshare they will raise their prices as well, happend in Austria recently.

Yea, I swore an oath never to be a Deutsch Telekom/T-Mobile customer ever again after experiencing their customer service first hand while I was stationed in Germany 10 years ago. They make Comcast look good.

I don't even acknowledge the existence of T-Mobile in the US.

Wow, what a news! It's a mystery for me how people can come to conclusions like that this late. I haven't bought any subsidized phone for like ten years. I understand that with CDMA careers it might be hard, but with GSM? There's no excuse.

I'll say again: I really like T-Mobile's $30/month prepaid unlimited data plan. Combine with Hangouts for voice and Voice for text (who names these?) and it's about the cheapest you can get for a smartphone.

(Tradeoff? Poor service outside cities.)

I'm very happy paying $10 per month with Republic Wireless. I got the MotoX for $300 up front. It's not exactly unlocked because they have custom software for wifi calls and handoff. But I get "unlimited data" via wifi and if I really want reliable data on the go there is a $25 plan, plus you can switch plans with their app up to twice a month and have it prorated. Think you need cellular data for maps? Get OSMAND and download the maps you need to your phone.

Everyone in the US gets unlimited data via WiFi.

Not if those wifi access points are connected to wired Internet providers with data transfer quotas...

The key thing is that your phone's voice and data service is offloaded to Wifi when possible, so you can use your phone from Timbuktu if there's wireless there. IE You don't even really need a data plan with them as long as you've got Wifi coverage.

>> You don't even really need a data plan with them as long as you've got Wifi coverage.

Yeah, last I checked they had a $5 per month plan that's wifi only. You can still make calls and texts but you have to be on wifi. Not my thing, but they have it.

>> Everyone in the US gets unlimited data via WiFi.

And yet they still make you pay for a "data plan" just because you have a "smart phone".

How much do you pay per month for your cell phone? Republic Wireless is a great deal because you can get a high-end smartphone without a data plan.

I'm not saying Republic isn't a good MVNO. I've never tried them. But everyone gets free data on WiFi. For what it's worth, I can get unlimited 4G for $30/mo with T-Mobile.

> For what it's worth, I can get unlimited 4G for $30/mo with T-Mobile.

Are you grandfathered in? On their website[0], the unlimited plan is listed at $80, and even their cheapest plan is $40.

[0] http://www.t-mobile.com/cell-phone-plans/individual.html

The $30 price is the cost of the add-on. $50 for base service, +$30 for unlimited data so the $80 plan you found is it.

Oh, I see. FWIW, Republic Wireless has unlimited 4G for $40/month (that's the whole price of the service, exclusive of taxes/government fees)

Not true. $30 is the total cost of 100 minutes per month and unlimited data for their pre-paid plan. BYOPhone and you pay $30/mo total.

wrong website. their prepaid plans are elsewhere.

http://prepaid-phones.t-mobile.com/prepaid-plans

other montly plans section at the top.

Not those living with satelite internet access. 5GB a month is the standard plan right now.

This makes sense for so many people; I (continue to) feel it's really only a matter of time.

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