This is a good way for Ars to generate clicks and a more honest headline probably wouldn't move the needle much, but it's worth being clear for HN that the objection here is not that locked phones are good for consumers, but that the subsidization deals locked phones enable are.
They aren’t though. Subsidized phones are like monthly car payments drive up costs and are targeted at people bad at math.
If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
I've had a couple of people who are decidedly good at math (engineers) explain to me that, at least here in Canada, for at least one carrier, for at least one kind of phone (recent, high-end model iphones) if you get out of the carrier contract the moment you can (2 years I think), you do get the phone for less than if you bought it outright and went on a market rate prepaid plan right away. Not even considering the interest free "instalment plan" that they are essentially buying it on.
I guess the carriers still make money because once habituated, especially if they've never done the port-number-to-new-carrier thing, people stay in the high priced plan longer than necessary. Like the three years until they've truly paid the above-market price for the phone, and are now eligible for another "free" phone which they may not even take advantage of.
For what it's worth, carrier locking phones has been illegal here for some years (and any phone from the locked era had to be unlocked for free for the asking after the law was changed) and it hasn't changed anything in terms of these rent-to-buy type carrier plans. So I don't know what the fuss is about. A contract is a contract.
Yeah as a fellow Canadian, I agree. When the unlocking policy was first discussed here, people had the same fears and that people would just run off with the phones. It turns out that people generally don't like being banned from a carrier or getting the hit on their credit.
I don't see why its different than a car really. While some dealerships are adding GPS trackers nowadays, there is nothing stopping you from buying a car on credit and driving it to Mexico and hiding it in a locked garage. It's going to be very difficult to buy another car if you do that though, and that's enough of a deterrence for most people as they have to continue living their lives and eventually buy a new car.
Canada is also a much smaller market that has minimal competition with unique cellular bands preventing reuse of said phones outside of a handful of other countries (without severe breakage of VoLTE, or missing low band coverage).
That's not true, it may have been true at one point in time like 20 years ago. Even Bell Canada says you can use your Canadian phone in most countries in the world: https://support.bell.ca/mobility/network_coverage/where_can_...
(obviously not super authoritative but they wouldn't tell people their phone worked in a country if it did not.)
It's possible there are some obscure features that may not work properly but for general usage as far as phone calls, texting, data usage, I've never heard of anyone having any issues with their Canadian phone internationally, besides maybe the cost of roaming.If you have a source from recent times that says this, I'd like to see it.
As far as minimal competition goes, there is not an infinite amount of cellphone carriers in the US either that will give you a phone on credit, especially if you have bad credit. I'm sure there are existing ways you can scam phones out of carriers too if you are fine with being banned from the carrier and/or torching your credit.
Yeah, just like the supermarket club cards are good for shoppers.
A similar psychological thing is going on in both cases I feel - some minority will manage to emerge winners due to a mixture of persistence, intelligence, luck, greed, etc. And the majority will get squeezed, or else how would such large percentages of marketing budgets continue to be pumped into club card and subscription schemes.
It's a little more nuanced than you're making out. I spent way, way too long working out the totals from the various methods of getting a new phone and getting the free phone as part of a 24/36 month agreement ended up being cheaper than many alternatives, primarily because you're paying the monthly plan amount whether you take the free phone or not. I personally think upgrading my phone after three years is a reasonable timeframe, but of course everyone is different.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
> getting the free phone as part of a 24/36 month agreement ended up being cheaper than many alternatives
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
Verizon is really thin on the ground out West, their coverage just keeps shrinking as their LTEiRA partners shut down or get bought out by T-Mobile and AT&T.
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
> I spent way, way too long working out the totals from the various methods of getting a new phone
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
How can comparing different methods for a couple minutes be charged? Or rather, would it not be charged evenly to multiple options since multiple options are being researched, including the proposed "default" of buying a phone outright and then finding a plan that will actually provide suitable service while saving money.
To your credit, just stick with the subsidized phone deal, and then don't upgrade when it's paid off. At that point, your phone is now technically unlocked
"I spent way, way too long" sounds like a lot more than "a couple minutes" to me.
My point is that there is no research cost for buying outright. You just buy the phone and then you pick whatever service and plan you want. If I have to spend significant amounts of time penny pinching on "deals" and contracts that probably means I'm trying to buy something I can't afford. Moreover, this tendency definitely leads to _more_ spending in the long, not less.
I've done the same thing as you and buying the phone separately was cheaper every time. In a normal jurisdiction the phone payment is a clear component of your bill and it is patently clear you're borrowing the full sale amount and paying back a higher amount of money.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.
I don’t know, my phone carrier charges me zero interest to “buy” my phone on a 36 month loan because of it. It’s not a huge financial windfall by any means, but it’s absolutely money in my pocket.
That's assuming they stop collecting on that loan once it's paid off. When I worked at TMobile we'd have accounts with phones that were eligible to be unlocked, and which were eligible to be moved to a cheaper plan, and the policy was just to leave them as-is unless they said something.
They keep you on a plan but they don't keep charging the payment for the device. In my case I'm on a cheaper plan than current offerings and have three lines, all with paid off devices.
That's only true if you're on a plan that supports it (i.e. the newer ones). It's been a while since I worked there, but I bet they still have legions of old folks on grandfathered plans that are not sensitive to whether the device is paid off or not.
In a competitive market ‘free’ interest deals just mean higher monthly premiums for basic service.
AT&T’s prepaid plans start at is 25$/month for unlimited calls & text, “Unlimited” data (After 16GB it degrades to 1.5mbps) + 10Gb tethering. Meanwhile their cheapest regular plan is 50$/month for worse service (4GB data).
Sure they don’t offer the best plans prepaid, but that’s basic price discrimination.
With a prepaid plan, you credit the operator, because you pay upfront, and the service is rendered after it, and ceases if your balance goes below zero.
With regular plans, the operator credits you, and you can be late with your payment for many days before the operator ceases servicing you.
So it's a month worth if credit, plus a different risk profile.
Also, it's market segmentation: the prepaid plan is the gateway drug %)
My family (parents, siblings) are asking me "How did our T-mobile phone bill balloon so much in the past decade?" and I can point to the slow creep and the plan changes they made that (without them knowing or anyone telling them) un-grandfathered them out of a favorable promotional plan. For instance my sister needed to increase her data cap about a few months before they moved our data to unlimited. It pushed her out of the promo and now the family plan costs $35/mo extra even though her line is getting the exact same things as mine, which is still on the promo pricing.
Then I tell them they'd be better served by switching to an MVNO offering significantly better rates and they come back and tell me they're locked in for a while because they just financed new devices.
I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
> I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
These systems rely on intentionally leaving people in the dark to manufacture legitimacy under the guise that well-educated consumers can avoid the hidden fees and restrictions. It's the expected end state when these shady schemes are allowed to exist.
I had one of those deals for 3 phones. I was paying $272 a month all in. Once I paid off the phones, I switched to an MVNO on the same carrier. I get the same level of service for $105 per month. My "free" phones cost me $168 x 24 months = $4032 for phones that cost about $3000 combined at retail pricing.
If it was Public Mobile, they really did their long-time customers dirty because of their points system change. I used to pay $27/month because of referrals and loyalty, and now it’s back up to ~$39 because their new system forces you to actively redeem your points.
I’m switching over to Lucky when I have the mindspace to do it.
I would agree with you (financing small purchases like a phone is a bad idea and causes people to spend money they shouldn't), but that doesn't make the clickbait acceptable. Ars Technica should accurately report the claims of the telco industry.
Cheaper phones have a way higher value/$ ratio. Instead of financializing expensive phones the market should encourage cheaper phones through increased demand.
You don't need to go for the cheapest phone, but I find the midrange, around $300-$400, to be the sweet spot. Sure, you could opt for something more expensive, but unless you have a specific need, the benefits won't be that noticeable. I'd rather put that extra money toward upgrading a PC instead. I chose a midrange Samsung for its practical customization options over stock Android, plus it comes with 4 promised updates. While it's not as long as the 7 years of updates from a Pixel, realistically, the battery will likely swell like a pillow before it even hits the 7th year anyway.
IME even mid tier phones won't have more than a year or so of security updates left, unless you buy them new. And even then it's often only 18-24 months. We should insist that companies support their phones longer or unlock and completely open source them at the EOL.
We’re likely talking about a small subset of users for whom open sourcing or similar efforts would be worthwhile. The bigger issue these days is that phones aren't designed to last. We've seen this trend ever since batteries became non-removable, and I doubt EU regulations will make a significant difference. Most users either dispose of their phones when they stop working or trade them in for a newer model. This is especially common with premium phones, while mid-range models might only fetch you $10 on a trade-in if you’re lucky.
Some companies do better in this regard. For example, Samsung provides four major updates, whereas the last mid-range Motorola I owned only gave me one. By the time I receive the fourth update on my current phone, I'll probably be dealing with bigger issues, like the battery not holding a charge—or worse. I wish phones were more serviceable, but that’s just not the case. Still, at mid-range prices, I’m fine with replacing it when it’s on its last legs.
If you're inclined, though, most Android phones allow you to unlock the bootloader and tinker with the software as much as you want.
I'm not saying all phones should be cheap. The market for premium phones has and will continue to exist. And who's to say finding ways to reduce the cost to produce phones isn't innovation?
I find that markets that are financialized where the price of the good is obfuscated are less efficient. This is because efficient markets rely on price discovery. Healthcare is an excellent example of this.
I buy cheap phones for projects so have experienced exactly this. If you go on any prepaid WISP site and look at their device selection ordered by lowest price there's always an asterisk and the quoted price is based on some kind of contract.
Typically the $1000+ premium phone market is for unlocked phones sold directly from the manufacturer.
The locked phones are usually sub $250 and have some kind of finacial gimmick to get the sticker price lower. Often it will be some carrier specific model name. Just sort by price low to high and you'll find them.
ATT, Verizon, and Tmobile are selling many many expensive phones, locked, on 24 momth payment plans, literally hundreds of possible configurations of dozens of models.
I used to buy $200 Android phones. I never had one last more than 18 months. I'm talking dead, not just annoyingly slow. I now have a 3.5 year old iPhone that I expect to get at least another 1.5 years out of. $200/yr compared to $133/yr but I'm generating less waste and getting a better overall experience the entire time I own the phone. For me it was absolutely worth it.
I bet you weren't buying midrange Motorolas. I bought a Moto G for $179 (forgot the model: may have been G1/G2, and that may have been promo pricing for an unlocked phone) and used it for close to 5 years. I only stopped using it because the camera quality was showing it's age relative to the flagships of the day.
You must be doing something wrong. I bought a few cheap mototola and xiaomi android phones over the years and they've lasted years and continue to work to this day.
As you are probably aware, popular phones like the iPhone 15 and Samsung Galaxy S24 (#1 and #2 in the USA) are in that range, costing $700 and $1300 for the 'basic' models.
That’s because subsidized plans don’t encourage shopping for the lowest price. Consumers just see free phone and optimize to buy the most expensive free phone available.
Sure, let’s just ignore the disastrous adware, bloatware etc that also “subsidize” these cheaper phones, to say nothing of the actual capabilities or user experience of said devices.
No such crap on Motorola phones. Posting from a five years old Moto One Vision. It's... a smartphone. It has a decent CPU, screen, camera, storage, NFC, etc. I couldn't say what's missing.
The only thing I'd get excited about in a new phone is a faster CPU.
I don't think GP meant that $500 to $2,000 is cheap, I think they meant a small purchase relative to something like a house.
A better distinction is not small vs. large, but appreciating assets vs. depreciating. Houses tend to increase in value, so it's usually okay to finance (pandemics and market crashes are the exceptions) because you often make a profit when it's time to sell. Phones tend to decrease in value after purchase, so financing it just means you're losing even more money at the end. Phones are also fragile so it's common to break one and still have to make payments.
If you know that you'll be buying a new phone every 3-4 years, you might as well start saving towards it, regardless of it costing 200€, 500€ or more. It's harder to do that with a car or a house.
In my world, >$100 is a large purchase. A car is a huge purchase that happens maybe only 2-3x in a lifetime, and purchasing a house is something I hear about in history books, when apparently there used to be a middle class.
I guess it will really depend on the user or need. I won't consider putting down a down payment for anything under 4 figures without some absolutely worthwhile plan (credit cards can do that for me at that range). At that point I need to weigh between if I really need it or not.
I even paid straight up for my current Laptop, some $2700. The only things in my life I threw a down payment on are furniture: my bed, my kitchen chair setup, and my patio furniture.
You speak as if a phone is gold bullion, which has no other value than to store value. Also note that time is also valuable, and can't be easily bought.
There may be a really good reason for a not well-off family to get a new and advanced phone from the phone company, for a small monthly payment. They can't afford the upfront cost, and will pay more for a depreciating asset. On the other hand, they now may have a phone with a great camera to record their kid's school graduation, or other such event that only occurs once. Or they may finally use a smartphone with 4G / 5G to have good-quality video calls with some faraway friends or kin, which were a pain with their old phone. Etc.
This still beats buying a new phone with a credit card, at 29.95% APR.
Monthly car payments can be good, though, as opposed to paying cash, assuming you can get a reasonable rate of return by conservatively investing the cash in a fairly liquid investment.
Current (risk free) 5 year TIPS real yield is 1.65%... Not sure if there are many car loans offered at a lower rate. If you were thinking a different investment, you'd of course need to adjust it for risk, inflation, and liquidity before comparing to the car loan.
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.
Why do you need to lock the phones for this? If the point is to lock customer to a subsidizing contract just do that: use the contract to enforce the lockin. What do they care if I use another sim card on the phone if I'm paying the monthly service for the duration of the contract?
The potential regulation is about the government making phones unlock automatically after two months of purchase. The regulation isn't about banning discounts or sales.
If unlocking is made mandatory, the phone subsidies will end. People will be forced to pay full price up front, or else effectively pay more as interest (even if that interest is effectively "hidden" in the overall increased price). So yes, this regulation is exactly about that.
You are wrong, empirically. We tossed that bollocks out in Canada seven years ago.
Miraculously, carriers simply started offering "tabs" or other language where you pay the subsidized phone cost as an addition to your plan bill for the contract period, with a clause that if you cancel early you still have to pay up the difference.
Arguments in favour of locking are nothing but corporate apologia and business crying wolf.
Sure, but how does the company account for the losses from people who get the phone and then stop paying and switch to another carrier?
What happens is the overall price goes up to offset those losses, even when it's not explicitly labeled as such. That's just basic economics. Empirically.
Or they buy the phone with a credit contract, as happens in the rest of the world.
If the major telcos only offer exorbitant interest rates, some other player will step in and offer the credit at better rates that fairly price the risk.
The interest rate on a credit contract will depend on the default rate. Arguably, a phone company can offer loans on a locked phone for lower interest rates than anyone else could, because they can cut off service if the loan isn't paid, which is an incentive to actually pay it.
I'm not all sure this is a good thing, but I can see the argument for why it might result in lower interest rates on phones.
None of this is going to matter to people with good credit.
...alternatively, the cell companies will just sell unlocked phones with the subsidies, since you're still locked into the same 1-or-2-year contract that was paying for the locked phones. This won't stop them from making those precious fractions of a cent from bundled shitware. They'll still make their money.
I'm fine with other people buying $1200 phones and then selling them to me a couple of years later for 1/2 to 2/3 the priceunlocked and ready for my consumption. The last new phone I bought was iPhone 12 and that was because 5G was the first really "worth buying into" tech jump in a while on phones.
I'm fine with other people buying $1200 phones and then selling them to me a couple of years later for 1/2 to 2/3 the priceunlocked and ready for my consumption. The last new phone I bought was iPhone 12 and that was because 5G was the first really tech jump in a while on phones.
Locked phones don't enable subsidized deals though. We still have subsidized deals in the UK but locking is a thing of the past. In fact they have started explicitly calling it like it is and breaking the price down into payments for the plan and payments for the phone, which stop once you've paid it off.
IIRC, years ago there was an EU directive forcing phone companies to separate service contracts and device payment plans. Network locking still exists, but unlock codes need to be free after you've paid off the phone. This leads to a situation here (Ireland) where some people are billed monthly for their phone itself, but the have a pre-pay plan on the sim card inside.
I thought the US had made a similar change banning that kind of co-mingling of charges.
I have to assume that you ultimately pay more in the UK then, because what prevents users from stopping paying after the first month, and switching to a cheaper plan with another provider, and keeping the phone?
Companies aren't going to repossess your phone the way it's worth it to repossess your car or house if you stop repaying your loan.
So it raises the overall price because the companies charge more in order to offset the losses of people who effectively steal the phones they never finished paying for.
> because what prevents users from stopping paying after the first month, and switching to a cheaper plan with another provider, and keeping the phone?
Same as what stops you breaking a contract and not paying any other debt: They'll start the collections process on you.
Yep, same in Canada. A phone contract shows up on your credit report (since you pay at the end of the month for the service received during the month) and if you were to not pay the penalty, the outstanding debt would show up there.
But the reality is that people who don't pay their phone contract tend to be the kinds of people who just ignore collections anyways and have a bad credit score to begin with.
That's the problem with small debts, and why phone locking was a clever solution -- if the phone becomes useless when you stop paying, people will actually pay it off when they wouldn't have before.
If they already have a bad credit score, then the carrier giving them an expensive phone without upfront payment is kinda on the carrier.
I think there's probably a significant net benefit to society from forcing carriers to unlock phones by default. If you're overseas, or need to temporarily use another carrier - you can.
If a carrier is not willing to carry the risk that someone who has bad credit might break the contract for an expensive phone - then I think perhaps that's not such a bad thing.
That is a perfectly reasonable argument. My point was that Ars' headline was deliberately misleading. Note that the article doesn't go into any real depth about alternative financing plans.
But I know linking to a PDF will put some people off. It's a fairly short response this time as well.
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>handsets that are free or heavily discounted off the manufacturer's
suggested retail price.
You do it by increasing contract prices and being able to collect a phone if you don't stay with the often 2-year contract for stuff like this. The final price is also much more expensive than buying outright.
This is a bit silly in am age where phone tech has plateaued and you can often get last year flagships for half the price at launch. Consumers don't need the newest phone at all.
>T-Mobile’s current unlocking policies also help T-
Mobile combat handset theft and fraud by sophisticated, international criminal organizations.
All androids and iphones have built in find - my - phone features these days, as well as the ability to wipe remotely. Phones are one of the least useful things to try and steal these days as a result, up there with a credit card. You can still get info and pawn off a wiped phone, but I don't see what T-Mobile does to prevent that further.
>because the proposal would force providers to reduce the line-up of their most
compelling handset offers. T
Sprint already was reducing lineups, even before the acquisition. And they don't really subsidize anymore. That's why I started buying my own phones. The T-Mobile store was just the Galaxy/IPhone store, featuring overly expensive otter cases.
>T-Mobile maintains that the Commission lacks authority to adopt the proposed rule
They really pulling off the Chevron defense (assumedly, it's in another document) with no hesitation, huh? I guess we'll see how that goes. I'm not going to pretend I know the full ramifications of how it will affect the FCC.
>however, a
provider subject to FCC-imposed asymmetric regulation on handset unlocking seeks to modify its commitments
Sounds like a horrible loophole to extend the policy as long as possible. So, no. They don't even provide much of an argument for when and where and what should be modified.
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Clickbait or not, I'm not really liking the arguments either way.
Ars has gone down the ragebait rabbit hole, which is perfectly rational, though they do it with technical stories, which people don't expect so much baiting.
Basically the carriers are making the standard libertarian argument, which makes sense. If you block locking, you already know what happens: we already know cell phone prices unlocked. The cell carriers are in essence capital providers and they know how to collect money from their customers.
> standard libertarian argument, which makes sense
It really doesn't. Libertarian arguments only make sense if you don't think about it too much, or are ignorant about the context and details, or you have a vested interest.
You can compare phone prices with countries where there is healthy competition and there is no or very limited blocking (France is a good example - you can buy phones outright, or get them on a payment plan that locks you on a more expensive monthly payment compared to the classic 20€ everything included including 20-150GB internet depending on the provider plan; after the initial period is over, you can do whatever you want). If you bother to look into the topic a little bit more than surface level, libertarian arguments usually fall apart easily.
France allows companies to have more onerous locking policies than the U.S. is proposing. French telecom companies are allowed to sell locked phones, require customers to request unlocks (rather than auto-unlocking, like the U.S. proposed rules), and the companies are allowed to take up to 3 months to respond to unlock requests, rather than requiring immediate unlocks after the first 60 days pass.
I like unlocked phones, and I buy my phones unlocked. But I agree with the sentiment here that we already know what the prices are for unlocked phones: manufacturers will sell them to you at that price, and telecom operators in the U.S. will universally allow you to bring your own, unlocked device free of charge. What the companies offering locked phones offer is an optional subsidy in exchange for a locked phone; while I'm sure there are reasonable arguments around e-waste that result in wanting some limits to locking, there is an obvious tradeoff in that the value of the subsidy diminishes as the allowed lock time diminishes. Mandating short limits to phone locks raises prices for poor people who can't afford unlocked phones. It's not always bad to do that — sometimes companies are taking advantage of poor people — but it's pretty true that will happen.
We are discussing the price of smartphones, not the price of data plans.
The infographic also seems pretty wrong, FWIW, especially considering that many US plans are uncapped and thus price/GB depends on usage. (There are sometimes, but not always, throttles past large amounts of usage eg 50GB/month, but since most of these plans cost less than $50/month, it seems extremely unlikely that most people are paying $6/GB as the website is claiming.) Verizon's "Visible" brand, for example, offers plans for $25/month with "unlimited" (soft cap at 60GB) data, for an effective $0.41/GB assuming you use up to the throttle limit. Even non-unlimited plans can be quite cheap; T-Mobile, for example, offers prepaid data plans for as little as $1/GB.
The site may be wrong and thanks for the inputs. However you can compare it to a French plan of 14€ per month for 140GB (and then throttled) by example and there are maybe cheaper prices per gb.
No, the UK-based website is wrong. There are enormous numbers of plan options in the US, and their sampling methodology was probably bad. You can get reasonably good 5G plans for $1/GB in America; probably cheaper if you're willing to go with smaller/worse providers.
The complaint they have isn't that unlocked phones exist; they're asking to be able to sell (or serve) unlocked phones alongside subsidized phones. Most people commenting on HN from the US are probably using unlocked phones on major carriers. I sure am.
If they hadn't abused this feature, they wouldn't be in this situation. I can totally understand carrier-locking a phone until the loan is paid off. But that's not what they used it for and now they're suffering hilarious regulatory attention.
I was already an existing TMobile customer. I bought myself and my wife an iPhone 11 in cash when the phones were brand new. Never had a contract. Already had an LTE plan, didn't change that plan at all. Just bought two new phones from TMobile and had them slap the sims in.
Fast forward to a couple months ago, I happened to notice while browsing my TMobile account that my phone was being reported as "Carrier Locked" with subtext that said "This phone is not eligible to be unlocked". Not my wife's though, hers was listed as "Unlocked". It took over a month of being yanked around by TMobile reps telling me they had to "escalate but the issue will be fixed within a week". It never was.
They would ask me why I wanted it unlocked. I would just respond something respectful but firm along the lines of "Because it's my phone. I paid for it. You have no business locking my device"
The way I see it, it was either theft or false advertising, plain and simple. Either they stole the phone from me after I bought it. Or, they sold me a device as unlocked but never realized that promise. It should have NEVER been locked. It makes me mad just thinking about it. I don't understand why a carrier even has the power to remotely lock a phone that was never theirs to lock in the first place.
This is all to say: I agree with your observation. They deserve heavy handed regulation because they have proven they will abuse any inch you give them.
This made me nervous, I used their web site under accounts check unlock status. It shows unknown for ours. We bought our Android phones on Amazon. I guess that's why the status shows as unknown for ours.
Isn’t the phone itself the best place to check, rather than your carrier’s website?
It’ll vary per manufacturer exactly where to find the info on the phone, but it’ll be reliable. You can also use an IMEI checker website, although some of those are ridden with ads and upsells.
I looked on my phone first, went through information on the About screen, didn't see it, might have been tired last night and overlooked it, will check again today. I'm not sure I feel comfortable pasting my IEMI into a web site, I thought about doing that though.
No, after over a month of them saying "it'll take a week for it after I escalate" and then me calling a week later and starting the whole conversation over, one day it finally was unlocked. And I moved to a new carrier.
I tried to get T-Mobile to unlock my far out of contract iphone 6s a few years ago, which should be super simple. The first time I talked to a rep and confirming everything they said it should show as unlocked in a few days. A month later and it wasn't unlocked. I called again and went through the same steps with another rep, they said it would be unlocked for sure this time. Nope. Luckily my friend gave me their old unlocked iPhone and I switched carriers. That 6s is still locked, T-mobile is scummy.
I generally don't have a problem with the trade where a customer gets a free or subsidized phone, and the carrier gets a more-or-less guaranteed customer for some agreed-upon time period. But:
* The phone needs to unlock the instant the agreement/deal ends. Automatically, without the need to phone home to the carrier to get it done.
* If the phone is on a payment plan, that shouldn't have anything to do with this; it should be unlocked from day one, and if the customer decides to switch carriers, they're still on the hook for paying out the rest of the payment plan, just like any other credit arrangement.
* Carriers must be agnostic to the devices on their network. They should not be permitted to refuse to allow you to bring your own phone, as long as that phone has been certified by whatever relevant regulatory body as being compliant with the various mobile radio standards.
I don't really get why there's so much consternation around this. If people want free or reduced-price things, sometimes they have to give something else in return.
If they don't want to, they can buy a full-price, unlocked phone. As long as that option remains, I don't see the problem with carriers offering alternate terms.
But I still don't get why the carriers are upset. They can still pair a free/subsidized phone with a 1- or 2-year service contract, with early termination fees that recoup their loss on the phone. Sure, having the phone locked is an incentive to either stay or pay the termination fees, but do enough people to matter actually manage to avoid paying the termination fees? Seems unlikely.
> I don't really get why there's so much consternation around this. If people want free or reduced-price things, sometimes they have to give something else in return.
Because carriers are abusing this. Isn't that obvious? People pay for their phone in its entirety and it's still not unlocked. They paid for their phone. They own it. But it's locked.
You make up some great standards to live by but they're nonsensical, unenforceable, and simply unrealistic.
Going to Apple's site, where it allows the user to pick a carrier or choose unlocked, they are all the same.
I thought all the major carrier did away with phone subsidies years ago so they could advertise lower monthly service fees, when those prices were becoming too high.
My phone is still subsidized, but it's through work, so I'm not the one paying the monthly bill. I didn't even think that was still an option for the average user buying on their own. Before switching my phone over to work, I had been buying unlocked phones at full price for a few years.
It goes way back to when some 700 MHz LTE spectrum was auctioned off in 2007. Before the auction and before the FCC finalized the rules that would apply to the spectrum the FCC commissioners were circulating drafts of rules they were considering. One of the drafts was proposing open access rules.
Google wrote to the FCC and made a binding commitment to bid at least $4.3 billion if the final rules included certain open access rules. The FCC then included those rules, thus guaranteeing they would get at least $4.3 billion.
Verizon outbid Google and so got that spectrum along with those open access requirements, which included no SIM locking.
In 2018 Verizon, citing fraud concerns, asked the FCC to relax the no locking rule. The FCC agreed, allowing a 60 day lock.
Getting AT&T to unlock an iPhone (or buying one unlocked from Apple) is little more than a formality. It's the $50 pre-paid phones you can pick up from Wal-mart that they don't want to unlock.
Of course they do. Every company doing predatory shit has some slick liars on payroll to come up with a story about how their lock-in policies and kafkaesque contract terms and surveillance and "opinionated design decisions" (or, "attempts to technologically control their users' behavior" for those who prefer plain English) are for your own good, actually, and any attempt to corral their behavior is an attack against their users
The messaging of companies in regulatory cases has become rote and predictable as the sectors they occupy have grown more concentrated. There is no reason to heed it at all in the present environment
Locking phones is not at all a requirement for carriers to offer subsidized deals. They could offer phones on installment plans conditional on an N-month contract. The buyer could switch carriers and keep the phone, but be on the hook to pay off the rest of the contract term. The only reason to use technological locks is to further trap a customer into a carrier relationship beyond the legal terms of their contract. It's yet another example of companies violating long-standing rights and norms and getting away with it because there's a computer involved.
What happens when the buyer says "no, I'm not paying" and sells the phone?
Instant money. Meanwhile the telecom company has to sell the debt at a massive discount to a collections agency or spend a ton of money collecting on it. That's assuming it can be collected on at all from someone that might just be running a scam.
With a locked phone, the phone just stops working and loses most of its value.
A rule forcing carriers to unlock phones after the term is up is fine. Forcing them to do it before is illogical. How many people are going to pay for two plans on one phone because they didn't like the first plan? I doubt it's more than those who will immediately abuse this rule and stop paying for the phone. I don't see the benefit to society here.
> What happens when the buyer says "no, I'm not paying" and sells the phone?
This is just like any thing you get a loan for. It goes to collections and your credit gets hurt. Why would normal consumers have restrictions because of bad actors?
AT&T operating income for 2023 was $23.5B and T-Mobile was $8.3B. Carriers are doing just fine.
The point is loans are generally secured with collateral. The bank can repossess your car or your house. It's worth it to go through the expensive repossession process because those items are high-value.
A carrier just eats the loss on a phone they provide but don't get paid for. The kinds of people who skip paying their cell phone bill generally have bad credit to begin with and couldn't care less if it goes to collections. The recovery rate for collections is pennies on the dollar.
And you know who will suffer if more people are able to basically keep phones for free? Not the carriers. They'll just jack up prices for everyone to offset the additional losses. You think they're just going to eat the cost themselves?
Why would a carrier give someone a phone if they have bad credit? It's not like they are mandated by law to provide everyone the latest iPhone regardless of credit score.
I worked in customer support for Rogers(A Canadian phone carrier) for a very short period before it was mandated to have unlocked phones and people still stopped paying their bill even if the phone was locked. The vast majority of people want to pay their bills on time especially for something as critical as phone service. The people who don't, are going to not pay their bill no matter what sort of rules in place because they either simply don't have the money or they don't care.
> Why would a carrier give someone a phone if they have bad credit?
Because phone locking means they're much more likely to pay it off, and so an unprofitable customer segment becomes a profitable one. Everybody wins -- the carrier doesn't lose money, and more people get phones.
> The people who don't, are going to not pay their bill no matter what sort of rules in place
That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.
> That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.
Well its not like they have to individually lock each phone they sell by hand and your phone does not turn into a brick if its locked to a carrier. Yes definitely the functionality is drastically reduced but there are also people/services that will unlock your phone for you that don't work for the carrier. Maybe if the phone actually was unable to be used at all if it was locked and you didn't pay the bill, that would be a valid argument.
I can't really agree with just because they do it, it must work argument, I have, and I'm sure you have too, worked for a lot of companies that had policies or practices that did not work.
I worked in customer service for Rogers, a large telecom in Canada before unlocking was mandated. There were lots of customers that did not pay their phone bill despite their phone being locked. If people don't have the money (whether it be their fault or not) they aren't going to pay their phone bill no matter what sort of incentive you give them.
Being able to use a second carrier without cancelling a contract with the first is useful for international travel; the 'roaming' rate is often much higher than the normal rate of other countries' local telcos. Plus, mixing-and-matching plans can be advantageous to the user in certain situations even within one country. For example, data-only plans are typically cheaper than data+calls, but one might still want a very modest calls plan for infrequent use - sometimes, better value can be attained by combining two separate contracts. Of course, whether or not telcos ought to allow such use of their contract handsets is another question entirely!
If there’s a big enough market for this use case, I suspect at least one carrier would do so. I’d imagine this would include some sort of payment in escrow, temporary unlock feature, or an optional add-on.
Otherwise, folks in this position should just buy the phone outright and unlocked so they don’t have any issues like you’re describing.
Simple. Since the major carriers these days offer "interest free installments" on phones, with subsidies or billing credits to make the TCO cheaper... then when this happens, the carrier: 1) loses no interest payments, 2) may lose installment payments, but this is a credit risk anyway - onus is on them to assess risk to a point of acceptability to them, and 3) get to not pay out the subsidies or billing credit.
All this amounts to is an additional layer of securing a loan. And pre-emptively so. "You cannot unlock this device because others may abuse this."
Assess identity and credit risk better.
I have little sympathy for the carriers, after having to fight Verizon over the claim that I, living in Seattle, and being an AT&T customer for a decade with 4-6 lines and devices, somehow decided to go to El Paso and buy a phone at a Walmart on Verizon, run it up making international calls and let it go to collections.
After supplying their (onerous, tbh) info around identity, police report, current utility billing and such, VZW said "We are still satisfied that the debt is valid and belongs to you, after reviewing your documentation with documentation that was supplied when the account was opened". When I said "well, given that you have verified my identity, and given that you state that the documentation you have from the account says that it was I who opened the account, I'd like to see that documentation". Verizon: "We cannot provide that data to you as it may violate customer privacy". Schrodingers account holder. It's me when they want to collect money, it's not me when they're concerned about sharing "someone's" info or billing records...
The counterpoint is that by locking people into carrier relationships allows T-Mobile and AT&T to offer loans on consumer electronics at much more consumer-friendly rates than others in the same business, e.g. Rent-A-Center. As I note downthread, `The total cost to buy a PS5 Slim is $500, the total cost to get a PS5 Slim through my nearest Rent-A-Center is $1,349.50.` You could introduce this pricing for iPhones for poor people too! This might even incentivize more people to use low-end Android hardware! But let's not act like this is 100% a good thing for everybody.
> The counterpoint is that by locking people into carrier relationships allows T-Mobile and AT&T to offer loans on consumer electronics at much more consumer-friendly rates than others in the same business
How does it do that? Its a lock to force people to stick with a provider, and pay through the nose in other ways. Phone plan rates in the US are terrible, restricting peoples ability to change provider through artificial means doesn't provide better rates.
Because it greatly lowers the risk that AT&T will need to write off the debt for your phone and sell it to a collections agency for pennies on the dollar.
It’s the same difference as a home mortgage vs unsecured credit card debt: When the threat exists that the lender can repossess your home if you don’t pay… they don’t have to worry as much about you not paying your mortgage, so they can offer a much lower rate.
You buy a phone for $1k, but you do it through your carrier, along with a $50/month plan. Because you’re on this plan, the carrier offers $600 off the phone price, paid in account credit over 24 months ($25/month), so your total monthly bill becomes $67/month for 2 years, then $50/month at the end of 2 years.
If, 3 months in, you find yourself unhappy with your carrier, you can still pay the remainder of your phone cost ($875) to own your phone outright and walk away. In that time, you’ve saved $75 off the full price of the phone.
Arguing that US carrier prices are exorbitant is not relevant to whether carrier locks and phone discount credits are worthwhile or cost effective.
I'm not sure what that has to do with locking your phone.
If you have a line of credit for the cost of a phone, then you have a line of credit for the cost of a phone. If you have a contract for service, them you have a contract for service.
If you try and terminate either then they will reclaim based upon your contract with them.
And the lock is collateral against a small, high-demand object that can easily be fenced. The phone lock is essentially the same as a hold against a car title until it’s paid off.
This would only be a real problem if there were no options to buy phones direct/outright without the lock. Instead, we’re likely to end up in some situation where carriers work with phone manufacturers to implement a sort of higher-level device lock feature that stipulates the device “belongs” to the carrier and can be functionally locked (a la the stolen device lock features that currently exist) if they ever go unpaid.
I used to have ATT for a little over ten years. I upgraded many phones with ATT next, etc.
The final straw for me was when they said they never got the phone I sent back and billed me 1k or something.
I saw the tracking number show it was delivered to a warehouse.
Their organization/inventory is a joke.
Can't they do the same thing with statement credits? I got a Pixel on Google Fi that was $X and over the next 24 months I will get a statement credit of $X/24, so after two years it will be "free" if I stay with Google until then. Otherwise, I paid the difference.
Consumers, especially lower-income ones, mostly look at the sticker price. Paying upfront and getting a discount later is the opposite of what they want and carriers know this.
What do you mean? This is what they’re doing. “Switch to [carrier name] and get the iPhone 16 Pro on us!” Then it’s explained that it’s all statement credit to cover the purchase price over X months.
Then AT&T and T-Mobile will have no problem in providing firmware that is comparable to the duration achieved by LineageOS, with significant punishment should they fail.
Even with a network lock, that product would be far more valuable than what is currently sold.
I guess it makes sense if you have not paid off the phone, but after you paid off the phone and own it, its yours, and should be able to use it with any carrier.
But I dont see how its good for users, locked phones only help the business.
The article mentions different forms of fraud and arbitrage. Other than “buy phones with stolen credit cards”, what fraud schemes do people run? How much of a difference would a 90-day deadline make?
The deal here is that if you commit to paying $xx/month for a year they will give you $yyy off a phone. It's not unreasonable but it's phrased in a deliberately confusing way to trigger cognitive biases in customers. Letting people break the contract after two months breaks this business model, so they simply won't offer it any more.
I'm a fan of the large discounts I get from the carrier. If I have to be locked to the carrier for the duration of the agreement for that discount, then that's fine with me.
I mean unless they would keep those discounts without being locked, but I don't ever see that happening.
How about just offering it both ways. Discounts if you are OK being locked to the service for the duration, or no/lesser discount to be able to leave the service early. That way everyone is happy?
I mean, you can already just forgo the rest of the discount and get unlocked whenever you want, so I don't really see the problem I guess.
The locking was supposed to be a lien mechanism for phones so that the carriers could protect their investments. However, unlike a bank, they can continue to benefit from customers after the loan is paid off. So, they just keep the phones locked and make you go through elaborate hoops just to keep you as a customer instead of providing a good service.
If the carriers are not allowed to subsidize devices, there will be easily thousands of financial institutions who would provide these services.
Just like the carriers, by allowing you to pay in installments.
Let’s call it what it is, it’s a carrier financed credit with a lien on the phone. It’s practically a secured credit line and they don’t want to let it go.
The funny thing is none of this would happen if they removed the lien (lock) right after the loan was paid off.
With the carrier the subsidizing the phone is tied to you using the carrier's phone service for 2 or 3 years. The money they make on that makes up for whatever subsidy they gave on the phone.
With a financial institution that subsidizes your phone what other service will they charge you for to make up for the cost of the subsidy?
Resellers don’t pay the sticker price, they buy the phones with a discount and they’re sure to charge a premium or interest.
I’m not saying it’s going to be either faster, better, or cheaper. The carriers are like a cartel that is abusing the phone locking system and should face the consequences. As the things are right now, they’re even locking unlocked phones to their service with immunity and individual users cannot effort to sue them or even worse users are not even allowed to sue them because of forced arbitration clauses. Should nothing change in this system because it benefits a certain range of companies?
Something something unfair to those who paid. Something something economy.
Well life isn't fair and it's about time the not-rich benefitted from that sentiment.
And I wonder if part of the US deficit comes from this horrible model of non-bankruptable loans given in the tune of 6 figures per individual that can never reasonably be paid off by most jobs. It's sure not like the public sector (you could at one point also provide 10 years of labor to pardon a loan) didn't fall into the same crap shoot of today's job market. So even that's not guaranteed way to stimulate labor.
I paid my loans off in 3 years. I'm all for a reset to this model and forgiveness to those stuck in it.
More blatant Clickbait garbage by the unreadable Ars Technica.
No, the carriers did not say anything of the sort - they said locking the phones keeps the price of handsets low, and that customers like cheap handsets.
Or better yet, buy your phone from the used market. Get a phone in perfect shape that was $800 two or three years ago for $200. Put a new battery in it.
Though I'm seriously considering going back to a $50 flip phone and enjoying the 2 weeks of battery life and general indestructibility. My current phone spends most of its time sitting on my desk doing nothing. It's hard to get excited about a newer and much BIGGER phone for $500 that will also spend most of its time sitting on my desk, doing nothing.
That's like telling someone to pay cash for a car, or not to finance their home. So many people can afford a monthly fee, but not the large one time payment.
It's not your finances, and it's not your place to tell someone else how to spend their money.
I'd argue that you should be seeking a used car if you're cost sensitive. That's sort of outdated advice in this absurd market, but the monthly payments for a car off the lot (new or used, if that's a thing) will probably be worse than saving that monthly payment yourself for 6 months and buying a beater to hold you over.
Lock or not, the main story is that there is no OSS baseband. Locking would not be possible if people had the ability to choose the baseband software that best fit their needs.
dude i am in africa right now. i want to give my phone to the security guard and it is locked by t-mobile. it is annoying to unlock. unlocked phones are already common, let's make them ubiquitous.
There should be a shortcut through our legal bureaucracy to punish obvious BS like this. The amount of time wasted to evaluate such stupid claims is surely huge.
I don't know about punishment being the norm, but I'd like to see an agency (perhaps a better-funded and more independent analog of the FTC Bureau of Consumer Protection) that is competent and efficient enough to legitimately earn a lot of deference. That is, they could issue a quasi-C&D "here's a handy step-by-step guide to avoid doing this the hard way (you dumbass)" letter and have any competent lawyer's default reaction be something like "they're almost certainly right and you'd be an idiot to fight this" instead of "here's how we can fight this".
Of course, that implies a system that places the interests of citizens at least on par with the interests of capital (and can conceive of those as distinct concepts in the first place), which is clearly communist crazy-talk.
It's all part of the proceedings. Even on the SCOTUS the dissenting option is allowed to be posted for why they went for the other decision.
Also, I don't think this response is really the same as an appeal. It's just another legal footnote to keep in mind if/when other parts of the court comes in to block this (as they are so likely to do this year. Can't let the working class have good things).
> T-Mobile estimates that its prepaid customers, for example, would see subsidies reduced by 40% to 70% for both its lower and higher-end devices, such as the Moto G, Samsung A15, and iPhone 12.
This is such a confusing line, you're in control of that. Also if that were true this would be great for you. Don't you want to be making more money? But in practice can you not just enforce this by contract? You must make a 12 month commitment to T-Mobile to qualify for discounted phones.
In the pre-paid market niche, you have people who really struggle to put together the money for an iPhone 12 all in one go, and T-Mobile has essentially worked to create a razors/blade model with some obfuscation. It's possible that disaggregating phone plans from installment pricing would benefit consumers in the long run, but let's not act like everybody would be prepared to transition to that world immediately. (I don't think T-Mobile is exactly concerned for their customers, but this subsidy regime exists for a reason.)
I buy prepaid specifically so that I can own my own unlocked phone and be able to do what I want with it without thinking about the carrier. Price isn't the issue, ownership is.
There's hundreds of us! I pay $15/month (+tax) for my service which has more than enough for my use most of the time. I don't get all the cross-promotional stuff, and I don't get a phone subsidy, but I think the lowest advertised price for all that stuff us $40/month. Saving $300/year gives me plenty of phone allowance, and I can buy my own tacos or whatever.
I don't have to pay for 'activation' when I move the sim from my phone into a new phone either, even though I hear about that happening still.
I don't have to try to get all my family lines on the same carrier either, so if the three of us are in a car stuck on the side of the road, we have a better chance of one of our phones working to get assistance.
That actually makes some sense and (I assume) you can let the service lapse and keep the phone if you don't have the money right now?
It seems in both cases T-Mobile is making a bet that you'll continue to use their service in one form or another. Is there a reason if it was unlocked you would immediately switch?
Yeah, you can let the service lapse and resume it, you just can't take the phone elsewhere. T-Mobile is taking on some risk there, to be sure.
As far as why you would immediately switch -- T-Mobile is not losing money on these phone subsidies in the aggregate (they are in some cases, to be sure). They're pricing the subsidies into their carrier rates. If this went through, they'd likely have to cut the subsidies and engage in pure competition on pre-paid mobile rates. I know some HN readers read that last line and go, "good," but the fact of the matter is that people who are buying subsidized phones on pre-paid plans are generally poor credit risks generally and phones lose a huge amount of their value the second you open the shrink-wrap so they're not very worthwhile as security for a secured loan, so by unbundling these two, T-Mobile starts to compete with everybody else on rates for service and somebody else steps in to handle the leases on phones, and if you look at that market segment, the answer in the US as to who is most prepared to take over that business, the answer is _Rent-A-Center_. The total cost to buy a PS5 Slim is $500, the total cost to get a PS5 Slim through my nearest Rent-A-Center is $1,349.50. Again, I am sure that T-Mobile is not advocating for this out of charity, but I'm not as convinced as some around here that this form of unbundling would be an unmitigated good thing.
EDIT: And to your point of, well wouldn't pre-paid operators all switch to a contract model, I don't think "you can't get phone service without a contract" is what people who are advocating for this reform want, and the primary customer for a pre-paid plan is someone who is too large a credit risk to get a 12-month contract through someone else. I said primary customer, if you want to tell me you're a great credit risk but you're on prepaid as an ideological stance, just pretend I already know that about you.
This is a good way for Ars to generate clicks and a more honest headline probably wouldn't move the needle much, but it's worth being clear for HN that the objection here is not that locked phones are good for consumers, but that the subsidization deals locked phones enable are.
They aren’t though. Subsidized phones are like monthly car payments drive up costs and are targeted at people bad at math.
If consumers paid out of pocket for their phones then they would be more picky about upgrading and plan prices. It would also make upselling shitty plan features harder so the carriers would loose a lot of money.
I've had a couple of people who are decidedly good at math (engineers) explain to me that, at least here in Canada, for at least one carrier, for at least one kind of phone (recent, high-end model iphones) if you get out of the carrier contract the moment you can (2 years I think), you do get the phone for less than if you bought it outright and went on a market rate prepaid plan right away. Not even considering the interest free "instalment plan" that they are essentially buying it on.
I guess the carriers still make money because once habituated, especially if they've never done the port-number-to-new-carrier thing, people stay in the high priced plan longer than necessary. Like the three years until they've truly paid the above-market price for the phone, and are now eligible for another "free" phone which they may not even take advantage of.
For what it's worth, carrier locking phones has been illegal here for some years (and any phone from the locked era had to be unlocked for free for the asking after the law was changed) and it hasn't changed anything in terms of these rent-to-buy type carrier plans. So I don't know what the fuss is about. A contract is a contract.
Yeah as a fellow Canadian, I agree. When the unlocking policy was first discussed here, people had the same fears and that people would just run off with the phones. It turns out that people generally don't like being banned from a carrier or getting the hit on their credit.
I don't see why its different than a car really. While some dealerships are adding GPS trackers nowadays, there is nothing stopping you from buying a car on credit and driving it to Mexico and hiding it in a locked garage. It's going to be very difficult to buy another car if you do that though, and that's enough of a deterrence for most people as they have to continue living their lives and eventually buy a new car.
Canada is also a much smaller market that has minimal competition with unique cellular bands preventing reuse of said phones outside of a handful of other countries (without severe breakage of VoLTE, or missing low band coverage).
That's not true, it may have been true at one point in time like 20 years ago. Even Bell Canada says you can use your Canadian phone in most countries in the world: https://support.bell.ca/mobility/network_coverage/where_can_... (obviously not super authoritative but they wouldn't tell people their phone worked in a country if it did not.)
It's possible there are some obscure features that may not work properly but for general usage as far as phone calls, texting, data usage, I've never heard of anyone having any issues with their Canadian phone internationally, besides maybe the cost of roaming.If you have a source from recent times that says this, I'd like to see it.
As far as minimal competition goes, there is not an infinite amount of cellphone carriers in the US either that will give you a phone on credit, especially if you have bad credit. I'm sure there are existing ways you can scam phones out of carriers too if you are fine with being banned from the carrier and/or torching your credit.
According to a quick look at frequencycheck.com, of the 14 LTE bands used in Canada, all but 2 of them are also used in the US.
Yeah, just like the supermarket club cards are good for shoppers.
A similar psychological thing is going on in both cases I feel - some minority will manage to emerge winners due to a mixture of persistence, intelligence, luck, greed, etc. And the majority will get squeezed, or else how would such large percentages of marketing budgets continue to be pumped into club card and subscription schemes.
It's a little more nuanced than you're making out. I spent way, way too long working out the totals from the various methods of getting a new phone and getting the free phone as part of a 24/36 month agreement ended up being cheaper than many alternatives, primarily because you're paying the monthly plan amount whether you take the free phone or not. I personally think upgrading my phone after three years is a reasonable timeframe, but of course everyone is different.
It wasn't cheaper than all alternatives. There were a bunch of virtual operators offering better monthly rates than the big networks but I've personally had bad experiences with network deprioritization on them. Depends very much on your individual circumstance, I'm in NYC and the network is clearly pretty saturated.
> getting the free phone as part of a 24/36 month agreement ended up being cheaper than many alternatives
This is generally strictly true, but most people don't move on to the next deal once they've paid off their device, and end up paying more than they would have had they bought the device outright, device+plan cost considered.
Try att prepaid. Its like 300$ a year you can’t beat that or at least not by much
Mint mobile for $180?
I got my whole family on Mint Mobile and they have never looked back. Everything else is ridiculously priced compared to Mint.
If their plan works in your area absolute steal
As soon as I drive outside of city limits I lose all practical cell coverage. One of the main reasons I stick to Verizon
Verizon is really thin on the ground out West, their coverage just keeps shrinking as their LTEiRA partners shut down or get bought out by T-Mobile and AT&T.
Between Reno and Las Vegas it's pretty stark, huge holes in Verizon's coverage and a few 3G CDMA only towers, while AT&T has strong band 14 coverage, and T-Mobile has slightly better coverage than Verizon but also lets you roam onto AT&T.
Meanwhile in the San Juans the situation is dire on Verizon, with only one tower just on Orcas Island. AT&T has a handful of towerd, two on Orcas and then they force roam everyone onto T-Mobile who has dozens of local towers.
So long as you are on AT&T or T-Mobile with roaming you'll have the best coverage possible, but if your stuck on Verizon it seems your in for a rough ride these days.
> I spent way, way too long working out the totals from the various methods of getting a new phone
Did you add this time you spent into those totals? I think if you did, your math would come out differently. Personally, if I even feel the need to do any math like this, the answer is already "no, I can't afford this".
How can comparing different methods for a couple minutes be charged? Or rather, would it not be charged evenly to multiple options since multiple options are being researched, including the proposed "default" of buying a phone outright and then finding a plan that will actually provide suitable service while saving money.
To your credit, just stick with the subsidized phone deal, and then don't upgrade when it's paid off. At that point, your phone is now technically unlocked
"I spent way, way too long" sounds like a lot more than "a couple minutes" to me.
My point is that there is no research cost for buying outright. You just buy the phone and then you pick whatever service and plan you want. If I have to spend significant amounts of time penny pinching on "deals" and contracts that probably means I'm trying to buy something I can't afford. Moreover, this tendency definitely leads to _more_ spending in the long, not less.
I've done the same thing as you and buying the phone separately was cheaper every time. In a normal jurisdiction the phone payment is a clear component of your bill and it is patently clear you're borrowing the full sale amount and paying back a higher amount of money.
If this isn't obviously the case, the "normal" plans are subsidizing phone sales. This means that you're almost certain to be better off with a vendor that doesn't offer this or at least offers it in a way that isn't dishonest.
At the end of the day, even if what you say is true making use of this deal makes things worse for everyone because it is part of a larger strategy. Inevitably you will be squeezed for more money than you otherwise would, sometimes it just takes a while.
I don’t know, my phone carrier charges me zero interest to “buy” my phone on a 36 month loan because of it. It’s not a huge financial windfall by any means, but it’s absolutely money in my pocket.
That's assuming they stop collecting on that loan once it's paid off. When I worked at TMobile we'd have accounts with phones that were eligible to be unlocked, and which were eligible to be moved to a cheaper plan, and the policy was just to leave them as-is unless they said something.
They keep you on a plan but they don't keep charging the payment for the device. In my case I'm on a cheaper plan than current offerings and have three lines, all with paid off devices.
That's only true if you're on a plan that supports it (i.e. the newer ones). It's been a while since I worked there, but I bet they still have legions of old folks on grandfathered plans that are not sensitive to whether the device is paid off or not.
They stop, then they let me trade my 3 yr old phone in for $1,000 and we do it again.
In a competitive market ‘free’ interest deals just mean higher monthly premiums for basic service.
AT&T’s prepaid plans start at is 25$/month for unlimited calls & text, “Unlimited” data (After 16GB it degrades to 1.5mbps) + 10Gb tethering. Meanwhile their cheapest regular plan is 50$/month for worse service (4GB data).
Sure they don’t offer the best plans prepaid, but that’s basic price discrimination.
Hey, it's the cost of credit.
With a prepaid plan, you credit the operator, because you pay upfront, and the service is rendered after it, and ceases if your balance goes below zero.
With regular plans, the operator credits you, and you can be late with your payment for many days before the operator ceases servicing you.
So it's a month worth if credit, plus a different risk profile.
Also, it's market segmentation: the prepaid plan is the gateway drug %)
There's no way the credit risk on the post paid plans are anywhere high enough to justify the higher prices.
My family (parents, siblings) are asking me "How did our T-mobile phone bill balloon so much in the past decade?" and I can point to the slow creep and the plan changes they made that (without them knowing or anyone telling them) un-grandfathered them out of a favorable promotional plan. For instance my sister needed to increase her data cap about a few months before they moved our data to unlimited. It pushed her out of the promo and now the family plan costs $35/mo extra even though her line is getting the exact same things as mine, which is still on the promo pricing.
Then I tell them they'd be better served by switching to an MVNO offering significantly better rates and they come back and tell me they're locked in for a while because they just financed new devices.
I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
> I'm souring on the ways we create systems where you have to be super savvy and walk on eggshells with how you use the service and utter the right incantations or else you get hosed.
These systems rely on intentionally leaving people in the dark to manufacture legitimacy under the guise that well-educated consumers can avoid the hidden fees and restrictions. It's the expected end state when these shady schemes are allowed to exist.
Yes. It's the canonical (and, I think, original) example of a https://en.wikipedia.org/wiki/Confusopoly .
I had one of those deals for 3 phones. I was paying $272 a month all in. Once I paid off the phones, I switched to an MVNO on the same carrier. I get the same level of service for $105 per month. My "free" phones cost me $168 x 24 months = $4032 for phones that cost about $3000 combined at retail pricing.
Never again.
Something is wrong if you're paying 90+ per line.
I had three free phones, service for 3 lines was 120$/mo. Phones were paid for up front and got ~60$ off each that in bill credits for 24 months.
The math came out exactly right
If it was Public Mobile, they really did their long-time customers dirty because of their points system change. I used to pay $27/month because of referrals and loyalty, and now it’s back up to ~$39 because their new system forces you to actively redeem your points.
I’m switching over to Lucky when I have the mindspace to do it.
I would agree with you (financing small purchases like a phone is a bad idea and causes people to spend money they shouldn't), but that doesn't make the clickbait acceptable. Ars Technica should accurately report the claims of the telco industry.
Most people don’t live in your affluent bubble where, apparently, a $500 to $2,000 expense is a “small purchase”.
You don’t need to pay $500 to $2000 for a phone. I don’t think I have ever paid that much.
Cheaper phones have a way higher value/$ ratio. Instead of financializing expensive phones the market should encourage cheaper phones through increased demand.
You don't need to go for the cheapest phone, but I find the midrange, around $300-$400, to be the sweet spot. Sure, you could opt for something more expensive, but unless you have a specific need, the benefits won't be that noticeable. I'd rather put that extra money toward upgrading a PC instead. I chose a midrange Samsung for its practical customization options over stock Android, plus it comes with 4 promised updates. While it's not as long as the 7 years of updates from a Pixel, realistically, the battery will likely swell like a pillow before it even hits the 7th year anyway.
IME even mid tier phones won't have more than a year or so of security updates left, unless you buy them new. And even then it's often only 18-24 months. We should insist that companies support their phones longer or unlock and completely open source them at the EOL.
We’re likely talking about a small subset of users for whom open sourcing or similar efforts would be worthwhile. The bigger issue these days is that phones aren't designed to last. We've seen this trend ever since batteries became non-removable, and I doubt EU regulations will make a significant difference. Most users either dispose of their phones when they stop working or trade them in for a newer model. This is especially common with premium phones, while mid-range models might only fetch you $10 on a trade-in if you’re lucky.
Some companies do better in this regard. For example, Samsung provides four major updates, whereas the last mid-range Motorola I owned only gave me one. By the time I receive the fourth update on my current phone, I'll probably be dealing with bigger issues, like the battery not holding a charge—or worse. I wish phones were more serviceable, but that’s just not the case. Still, at mid-range prices, I’m fine with replacing it when it’s on its last legs.
If you're inclined, though, most Android phones allow you to unlock the bootloader and tinker with the software as much as you want.
You can get a (used) Pixel 6a for well under $200 and it has updates until mid 2027.
A brand new Pixel 8a is under $500 and has updates until 2031.
Who will fund R&D into new innovations then?
Cheaper phones by definition have slimmer margins.
I'm not saying all phones should be cheap. The market for premium phones has and will continue to exist. And who's to say finding ways to reduce the cost to produce phones isn't innovation?
I find that markets that are financialized where the price of the good is obfuscated are less efficient. This is because efficient markets rely on price discovery. Healthcare is an excellent example of this.
I think it's impossible to buy a phone from any of the major carriers online without seeing the full upfront price at least a few times on screen.
And in store there's clearly the price tag right beside the demo model.
So hard to see how its obsfucated like healthcare.
I buy cheap phones for projects so have experienced exactly this. If you go on any prepaid WISP site and look at their device selection ordered by lowest price there's always an asterisk and the quoted price is based on some kind of contract.
The prepaid phone models available are usually the cheaper phones?
Or is there some carrier that sells the expensive $1000+ phones on prepaid plans?
Typically the $1000+ premium phone market is for unlocked phones sold directly from the manufacturer.
The locked phones are usually sub $250 and have some kind of finacial gimmick to get the sticker price lower. Often it will be some carrier specific model name. Just sort by price low to high and you'll find them.
Huh? I'm talking about the US?
ATT, Verizon, and Tmobile are selling many many expensive phones, locked, on 24 momth payment plans, literally hundreds of possible configurations of dozens of models.
I used to buy $200 Android phones. I never had one last more than 18 months. I'm talking dead, not just annoyingly slow. I now have a 3.5 year old iPhone that I expect to get at least another 1.5 years out of. $200/yr compared to $133/yr but I'm generating less waste and getting a better overall experience the entire time I own the phone. For me it was absolutely worth it.
I bet you weren't buying midrange Motorolas. I bought a Moto G for $179 (forgot the model: may have been G1/G2, and that may have been promo pricing for an unlocked phone) and used it for close to 5 years. I only stopped using it because the camera quality was showing it's age relative to the flagships of the day.
You must be doing something wrong. I bought a few cheap mototola and xiaomi android phones over the years and they've lasted years and continue to work to this day.
As you are probably aware, popular phones like the iPhone 15 and Samsung Galaxy S24 (#1 and #2 in the USA) are in that range, costing $700 and $1300 for the 'basic' models.
That’s because subsidized plans don’t encourage shopping for the lowest price. Consumers just see free phone and optimize to buy the most expensive free phone available.
I find it hard to believe that consumers are that dumb that they can't do an addition and multiplication to find the actual TCO.
Somehow the rest of the world gets by with much cheaper phones.
I love this take-
Sure, let’s just ignore the disastrous adware, bloatware etc that also “subsidize” these cheaper phones, to say nothing of the actual capabilities or user experience of said devices.
No such crap on Motorola phones. Posting from a five years old Moto One Vision. It's... a smartphone. It has a decent CPU, screen, camera, storage, NFC, etc. I couldn't say what's missing.
The only thing I'd get excited about in a new phone is a faster CPU.
Much of the world “gets by” on outdoor toilets, but we put value on indoor plumbing don’t we?
Popular or not they are luxury goods, and a modern iphone can be had for a couple hundred bucks used (SE 2nd gen)
I don't think GP meant that $500 to $2,000 is cheap, I think they meant a small purchase relative to something like a house.
A better distinction is not small vs. large, but appreciating assets vs. depreciating. Houses tend to increase in value, so it's usually okay to finance (pandemics and market crashes are the exceptions) because you often make a profit when it's time to sell. Phones tend to decrease in value after purchase, so financing it just means you're losing even more money at the end. Phones are also fragile so it's common to break one and still have to make payments.
If you know that you'll be buying a new phone every 3-4 years, you might as well start saving towards it, regardless of it costing 200€, 500€ or more. It's harder to do that with a car or a house.
compared to a car (medium) or house (large)?
In my world, >$100 is a large purchase. A car is a huge purchase that happens maybe only 2-3x in a lifetime, and purchasing a house is something I hear about in history books, when apparently there used to be a middle class.
I guess it will really depend on the user or need. I won't consider putting down a down payment for anything under 4 figures without some absolutely worthwhile plan (credit cards can do that for me at that range). At that point I need to weigh between if I really need it or not.
I even paid straight up for my current Laptop, some $2700. The only things in my life I threw a down payment on are furniture: my bed, my kitchen chair setup, and my patio furniture.
You speak as if a phone is gold bullion, which has no other value than to store value. Also note that time is also valuable, and can't be easily bought.
There may be a really good reason for a not well-off family to get a new and advanced phone from the phone company, for a small monthly payment. They can't afford the upfront cost, and will pay more for a depreciating asset. On the other hand, they now may have a phone with a great camera to record their kid's school graduation, or other such event that only occurs once. Or they may finally use a smartphone with 4G / 5G to have good-quality video calls with some faraway friends or kin, which were a pain with their old phone. Etc.
This still beats buying a new phone with a credit card, at 29.95% APR.
There's a multitude of false claims that phone companies can make, but we should still expect journalists to report those claims accurately.
Monthly car payments can be good, though, as opposed to paying cash, assuming you can get a reasonable rate of return by conservatively investing the cash in a fairly liquid investment.
Current (risk free) 5 year TIPS real yield is 1.65%... Not sure if there are many car loans offered at a lower rate. If you were thinking a different investment, you'd of course need to adjust it for risk, inflation, and liquidity before comparing to the car loan.
They type of people they target don't even have money saved for an emergency. Let alone money to invest.
There are economic environments where this is true, but I think they tend to be the exception, not the rule. Car loan rates right now are quite steep.
Yes they are.
If you were going to buy a plan from AT&T anyways at $60/month, they are willing to give you a $800 phone for “free” if they can lock you into a 2 year contract.
Buying your own phone for $800 and paying $60/month isn’t a better deal but it does give you flexibility to drop the carrier whenever you want.
Consumers can decide.
Banning a consumer option sounds anti-consumer, not pro.
Why do you need to lock the phones for this? If the point is to lock customer to a subsidizing contract just do that: use the contract to enforce the lockin. What do they care if I use another sim card on the phone if I'm paying the monthly service for the duration of the contract?
It often comes down to enforcement. Cellphone debt is near impossible to collect, I believe statute of limitations is only 2 years in many states.
The contract is likely near worthless if sent to collections.
Don't you have credit bureaus that serve as deterrents? ie. Nobody wants to get a horrible credit score over a phone.
I doubt they unlock the phone after the subsidy expires.
I thought FCC regulations require that phones be unlocked after 60 days? At least with straight talk it auto unlocks in 60 days
https://www.tfwunlockpolicy.com/wps/portal/home
I don't think that is a more accurate headline.
The potential regulation is about the government making phones unlock automatically after two months of purchase. The regulation isn't about banning discounts or sales.
If unlocking is made mandatory, the phone subsidies will end. People will be forced to pay full price up front, or else effectively pay more as interest (even if that interest is effectively "hidden" in the overall increased price). So yes, this regulation is exactly about that.
You are wrong, empirically. We tossed that bollocks out in Canada seven years ago.
Miraculously, carriers simply started offering "tabs" or other language where you pay the subsidized phone cost as an addition to your plan bill for the contract period, with a clause that if you cancel early you still have to pay up the difference.
Arguments in favour of locking are nothing but corporate apologia and business crying wolf.
Sure, but how does the company account for the losses from people who get the phone and then stop paying and switch to another carrier?
What happens is the overall price goes up to offset those losses, even when it's not explicitly labeled as such. That's just basic economics. Empirically.
Which part of this having actually been done in Canada and other regions, and what you're claiming not happening is unclear to you?
American Exceptionalism at work...
Which part do you not understand about prices having gone up as a result? So people are literally paying a price for it?
And stop with the country-based insults, please. It's not appropriate at all for HN. There's nothing "exceptional" about basic economic principles.
Or they buy the phone with a credit contract, as happens in the rest of the world.
If the major telcos only offer exorbitant interest rates, some other player will step in and offer the credit at better rates that fairly price the risk.
The interest rate on a credit contract will depend on the default rate. Arguably, a phone company can offer loans on a locked phone for lower interest rates than anyone else could, because they can cut off service if the loan isn't paid, which is an incentive to actually pay it.
I'm not all sure this is a good thing, but I can see the argument for why it might result in lower interest rates on phones.
None of this is going to matter to people with good credit.
Even if that's true it's still a less accurate headline.
The rule is about unlocking, not deals.
The carriers say this is bad for consumers.
Both those can be true and the current headline captures that.
...alternatively, the cell companies will just sell unlocked phones with the subsidies, since you're still locked into the same 1-or-2-year contract that was paying for the locked phones. This won't stop them from making those precious fractions of a cent from bundled shitware. They'll still make their money.
I'm fine with other people buying $1200 phones and then selling them to me a couple of years later for 1/2 to 2/3 the priceunlocked and ready for my consumption. The last new phone I bought was iPhone 12 and that was because 5G was the first really "worth buying into" tech jump in a while on phones.
I'm fine with other people buying $1200 phones and then selling them to me a couple of years later for 1/2 to 2/3 the priceunlocked and ready for my consumption. The last new phone I bought was iPhone 12 and that was because 5G was the first really tech jump in a while on phones.
Locked phones don't enable subsidized deals though. We still have subsidized deals in the UK but locking is a thing of the past. In fact they have started explicitly calling it like it is and breaking the price down into payments for the plan and payments for the phone, which stop once you've paid it off.
IIRC, years ago there was an EU directive forcing phone companies to separate service contracts and device payment plans. Network locking still exists, but unlock codes need to be free after you've paid off the phone. This leads to a situation here (Ireland) where some people are billed monthly for their phone itself, but the have a pre-pay plan on the sim card inside.
I thought the US had made a similar change banning that kind of co-mingling of charges.
I have to assume that you ultimately pay more in the UK then, because what prevents users from stopping paying after the first month, and switching to a cheaper plan with another provider, and keeping the phone?
Companies aren't going to repossess your phone the way it's worth it to repossess your car or house if you stop repaying your loan.
So it raises the overall price because the companies charge more in order to offset the losses of people who effectively steal the phones they never finished paying for.
> because what prevents users from stopping paying after the first month, and switching to a cheaper plan with another provider, and keeping the phone?
Same as what stops you breaking a contract and not paying any other debt: They'll start the collections process on you.
Yep, same in Canada. A phone contract shows up on your credit report (since you pay at the end of the month for the service received during the month) and if you were to not pay the penalty, the outstanding debt would show up there.
But the reality is that people who don't pay their phone contract tend to be the kinds of people who just ignore collections anyways and have a bad credit score to begin with.
That's the problem with small debts, and why phone locking was a clever solution -- if the phone becomes useless when you stop paying, people will actually pay it off when they wouldn't have before.
> and have a bad credit score to begin with.
If they already have a bad credit score, then the carrier giving them an expensive phone without upfront payment is kinda on the carrier.
I think there's probably a significant net benefit to society from forcing carriers to unlock phones by default. If you're overseas, or need to temporarily use another carrier - you can.
If a carrier is not willing to carry the risk that someone who has bad credit might break the contract for an expensive phone - then I think perhaps that's not such a bad thing.
> and have a bad credit score to begin with.
They do a credit check for these deals. They wouldn't be able to get the deal if they have bad credit.
That is a perfectly reasonable argument. My point was that Ars' headline was deliberately misleading. Note that the article doesn't go into any real depth about alternative financing plans.
If you really don't like the article, you can always read the FCC statement instead: https://www.fcc.gov/ecfs/document/1017178290200/1
But I know linking to a PDF will put some people off. It's a fairly short response this time as well.
----
>handsets that are free or heavily discounted off the manufacturer's suggested retail price.
You do it by increasing contract prices and being able to collect a phone if you don't stay with the often 2-year contract for stuff like this. The final price is also much more expensive than buying outright.
This is a bit silly in am age where phone tech has plateaued and you can often get last year flagships for half the price at launch. Consumers don't need the newest phone at all.
>T-Mobile’s current unlocking policies also help T- Mobile combat handset theft and fraud by sophisticated, international criminal organizations.
All androids and iphones have built in find - my - phone features these days, as well as the ability to wipe remotely. Phones are one of the least useful things to try and steal these days as a result, up there with a credit card. You can still get info and pawn off a wiped phone, but I don't see what T-Mobile does to prevent that further.
>because the proposal would force providers to reduce the line-up of their most compelling handset offers. T
Sprint already was reducing lineups, even before the acquisition. And they don't really subsidize anymore. That's why I started buying my own phones. The T-Mobile store was just the Galaxy/IPhone store, featuring overly expensive otter cases.
>T-Mobile maintains that the Commission lacks authority to adopt the proposed rule
They really pulling off the Chevron defense (assumedly, it's in another document) with no hesitation, huh? I guess we'll see how that goes. I'm not going to pretend I know the full ramifications of how it will affect the FCC.
>however, a provider subject to FCC-imposed asymmetric regulation on handset unlocking seeks to modify its commitments
Sounds like a horrible loophole to extend the policy as long as possible. So, no. They don't even provide much of an argument for when and where and what should be modified.
-----
Clickbait or not, I'm not really liking the arguments either way.
Ars has gone down the ragebait rabbit hole, which is perfectly rational, though they do it with technical stories, which people don't expect so much baiting.
Basically the carriers are making the standard libertarian argument, which makes sense. If you block locking, you already know what happens: we already know cell phone prices unlocked. The cell carriers are in essence capital providers and they know how to collect money from their customers.
> standard libertarian argument, which makes sense
It really doesn't. Libertarian arguments only make sense if you don't think about it too much, or are ignorant about the context and details, or you have a vested interest.
You can compare phone prices with countries where there is healthy competition and there is no or very limited blocking (France is a good example - you can buy phones outright, or get them on a payment plan that locks you on a more expensive monthly payment compared to the classic 20€ everything included including 20-150GB internet depending on the provider plan; after the initial period is over, you can do whatever you want). If you bother to look into the topic a little bit more than surface level, libertarian arguments usually fall apart easily.
France allows companies to have more onerous locking policies than the U.S. is proposing. French telecom companies are allowed to sell locked phones, require customers to request unlocks (rather than auto-unlocking, like the U.S. proposed rules), and the companies are allowed to take up to 3 months to respond to unlock requests, rather than requiring immediate unlocks after the first 60 days pass.
I like unlocked phones, and I buy my phones unlocked. But I agree with the sentiment here that we already know what the prices are for unlocked phones: manufacturers will sell them to you at that price, and telecom operators in the U.S. will universally allow you to bring your own, unlocked device free of charge. What the companies offering locked phones offer is an optional subsidy in exchange for a locked phone; while I'm sure there are reasonable arguments around e-waste that result in wanting some limits to locking, there is an obvious tradeoff in that the value of the subsidy diminishes as the allowed lock time diminishes. Mandating short limits to phone locks raises prices for poor people who can't afford unlocked phones. It's not always bad to do that — sometimes companies are taking advantage of poor people — but it's pretty true that will happen.
Keep in mind that prices in France are WAY lower than in the US according to this site. https://www.cable.co.uk/mobiles/worldwide-data-pricing/ (edit: bad autocorrect)
We are discussing the price of smartphones, not the price of data plans.
The infographic also seems pretty wrong, FWIW, especially considering that many US plans are uncapped and thus price/GB depends on usage. (There are sometimes, but not always, throttles past large amounts of usage eg 50GB/month, but since most of these plans cost less than $50/month, it seems extremely unlikely that most people are paying $6/GB as the website is claiming.) Verizon's "Visible" brand, for example, offers plans for $25/month with "unlimited" (soft cap at 60GB) data, for an effective $0.41/GB assuming you use up to the throttle limit. Even non-unlimited plans can be quite cheap; T-Mobile, for example, offers prepaid data plans for as little as $1/GB.
The site may be wrong and thanks for the inputs. However you can compare it to a French plan of 14€ per month for 140GB (and then throttled) by example and there are maybe cheaper prices per gb.
Are people paying $6/GB on average in the US?
No, the UK-based website is wrong. There are enormous numbers of plan options in the US, and their sampling methodology was probably bad. You can get reasonably good 5G plans for $1/GB in America; probably cheaper if you're willing to go with smaller/worse providers.
The complaint they have isn't that unlocked phones exist; they're asking to be able to sell (or serve) unlocked phones alongside subsidized phones. Most people commenting on HN from the US are probably using unlocked phones on major carriers. I sure am.
thanks for creating a meaningful dialogue here, wish ars would try to do the same
They can still lock the user in with early termination fees
Ars Technica has been downhill ever since Condé Nast bought them. So has Wired - sometimes the stupidity is just unreadable.
If they hadn't abused this feature, they wouldn't be in this situation. I can totally understand carrier-locking a phone until the loan is paid off. But that's not what they used it for and now they're suffering hilarious regulatory attention.
tsk tsk. I almost feel bad for them.
I was already an existing TMobile customer. I bought myself and my wife an iPhone 11 in cash when the phones were brand new. Never had a contract. Already had an LTE plan, didn't change that plan at all. Just bought two new phones from TMobile and had them slap the sims in.
Fast forward to a couple months ago, I happened to notice while browsing my TMobile account that my phone was being reported as "Carrier Locked" with subtext that said "This phone is not eligible to be unlocked". Not my wife's though, hers was listed as "Unlocked". It took over a month of being yanked around by TMobile reps telling me they had to "escalate but the issue will be fixed within a week". It never was.
They would ask me why I wanted it unlocked. I would just respond something respectful but firm along the lines of "Because it's my phone. I paid for it. You have no business locking my device"
The way I see it, it was either theft or false advertising, plain and simple. Either they stole the phone from me after I bought it. Or, they sold me a device as unlocked but never realized that promise. It should have NEVER been locked. It makes me mad just thinking about it. I don't understand why a carrier even has the power to remotely lock a phone that was never theirs to lock in the first place.
This is all to say: I agree with your observation. They deserve heavy handed regulation because they have proven they will abuse any inch you give them.
This made me nervous, I used their web site under accounts check unlock status. It shows unknown for ours. We bought our Android phones on Amazon. I guess that's why the status shows as unknown for ours.
Isn’t the phone itself the best place to check, rather than your carrier’s website?
It’ll vary per manufacturer exactly where to find the info on the phone, but it’ll be reliable. You can also use an IMEI checker website, although some of those are ridden with ads and upsells.
I looked on my phone first, went through information on the About screen, didn't see it, might have been tired last night and overlooked it, will check again today. I'm not sure I feel comfortable pasting my IEMI into a web site, I thought about doing that though.
I think you can just tell them you’re traveling out of the country?
Do you mean that your phone remains locked?
Ah, sorry. I forgot part of the story :)
No, after over a month of them saying "it'll take a week for it after I escalate" and then me calling a week later and starting the whole conversation over, one day it finally was unlocked. And I moved to a new carrier.
I tried to get T-Mobile to unlock my far out of contract iphone 6s a few years ago, which should be super simple. The first time I talked to a rep and confirming everything they said it should show as unlocked in a few days. A month later and it wasn't unlocked. I called again and went through the same steps with another rep, they said it would be unlocked for sure this time. Nope. Luckily my friend gave me their old unlocked iPhone and I switched carriers. That 6s is still locked, T-mobile is scummy.
I generally don't have a problem with the trade where a customer gets a free or subsidized phone, and the carrier gets a more-or-less guaranteed customer for some agreed-upon time period. But:
* The phone needs to unlock the instant the agreement/deal ends. Automatically, without the need to phone home to the carrier to get it done.
* If the phone is on a payment plan, that shouldn't have anything to do with this; it should be unlocked from day one, and if the customer decides to switch carriers, they're still on the hook for paying out the rest of the payment plan, just like any other credit arrangement.
* Carriers must be agnostic to the devices on their network. They should not be permitted to refuse to allow you to bring your own phone, as long as that phone has been certified by whatever relevant regulatory body as being compliant with the various mobile radio standards.
I don't really get why there's so much consternation around this. If people want free or reduced-price things, sometimes they have to give something else in return.
If they don't want to, they can buy a full-price, unlocked phone. As long as that option remains, I don't see the problem with carriers offering alternate terms.
But I still don't get why the carriers are upset. They can still pair a free/subsidized phone with a 1- or 2-year service contract, with early termination fees that recoup their loss on the phone. Sure, having the phone locked is an incentive to either stay or pay the termination fees, but do enough people to matter actually manage to avoid paying the termination fees? Seems unlikely.
> I don't really get why there's so much consternation around this. If people want free or reduced-price things, sometimes they have to give something else in return.
Because carriers are abusing this. Isn't that obvious? People pay for their phone in its entirety and it's still not unlocked. They paid for their phone. They own it. But it's locked.
You make up some great standards to live by but they're nonsensical, unenforceable, and simply unrealistic.
> claiming that locking phones to a carrier's network makes it possible to provide cheaper handsets to consumers
Weird, because they seem to have the same prices as Verizon.
Going to Apple's site, where it allows the user to pick a carrier or choose unlocked, they are all the same.
I thought all the major carrier did away with phone subsidies years ago so they could advertise lower monthly service fees, when those prices were becoming too high.
My phone is still subsidized, but it's through work, so I'm not the one paying the monthly bill. I didn't even think that was still an option for the average user buying on their own. Before switching my phone over to work, I had been buying unlocked phones at full price for a few years.
With TMobile when I upgraded they gave me 1000$ incentive in 24 month increments.
So yes they do offer "cheaper phone prices" but of course you are locked to their expensive plan for years.
Verizon offer the exact same thing. They just unlock phones after 60 days (in fairness they have to, but still, they seem to be doing just fine)
why do they have to? is it just verizon or do others have to do unlock it after 60 days too?
It goes way back to when some 700 MHz LTE spectrum was auctioned off in 2007. Before the auction and before the FCC finalized the rules that would apply to the spectrum the FCC commissioners were circulating drafts of rules they were considering. One of the drafts was proposing open access rules.
Google wrote to the FCC and made a binding commitment to bid at least $4.3 billion if the final rules included certain open access rules. The FCC then included those rules, thus guaranteeing they would get at least $4.3 billion.
Verizon outbid Google and so got that spectrum along with those open access requirements, which included no SIM locking.
In 2018 Verizon, citing fraud concerns, asked the FCC to relax the no locking rule. The FCC agreed, allowing a 60 day lock.
Verizon does but over 36 months.
did they say explicitly who it's cheaper for?
> claiming that locking phones to a carrier's network makes it possible to provide cheaper handsets to consumers
And somehow an iPhone today isn't cheaper than when it first came out and there was no subsidy from Cingular.
Getting AT&T to unlock an iPhone (or buying one unlocked from Apple) is little more than a formality. It's the $50 pre-paid phones you can pick up from Wal-mart that they don't want to unlock.
Of course they do. Every company doing predatory shit has some slick liars on payroll to come up with a story about how their lock-in policies and kafkaesque contract terms and surveillance and "opinionated design decisions" (or, "attempts to technologically control their users' behavior" for those who prefer plain English) are for your own good, actually, and any attempt to corral their behavior is an attack against their users
The messaging of companies in regulatory cases has become rote and predictable as the sectors they occupy have grown more concentrated. There is no reason to heed it at all in the present environment
Locking phones is not at all a requirement for carriers to offer subsidized deals. They could offer phones on installment plans conditional on an N-month contract. The buyer could switch carriers and keep the phone, but be on the hook to pay off the rest of the contract term. The only reason to use technological locks is to further trap a customer into a carrier relationship beyond the legal terms of their contract. It's yet another example of companies violating long-standing rights and norms and getting away with it because there's a computer involved.
What happens when the buyer says "no, I'm not paying" and sells the phone?
Instant money. Meanwhile the telecom company has to sell the debt at a massive discount to a collections agency or spend a ton of money collecting on it. That's assuming it can be collected on at all from someone that might just be running a scam.
With a locked phone, the phone just stops working and loses most of its value.
A rule forcing carriers to unlock phones after the term is up is fine. Forcing them to do it before is illogical. How many people are going to pay for two plans on one phone because they didn't like the first plan? I doubt it's more than those who will immediately abuse this rule and stop paying for the phone. I don't see the benefit to society here.
> What happens when the buyer says "no, I'm not paying" and sells the phone?
This is just like any thing you get a loan for. It goes to collections and your credit gets hurt. Why would normal consumers have restrictions because of bad actors?
AT&T operating income for 2023 was $23.5B and T-Mobile was $8.3B. Carriers are doing just fine.
The point is loans are generally secured with collateral. The bank can repossess your car or your house. It's worth it to go through the expensive repossession process because those items are high-value.
A carrier just eats the loss on a phone they provide but don't get paid for. The kinds of people who skip paying their cell phone bill generally have bad credit to begin with and couldn't care less if it goes to collections. The recovery rate for collections is pennies on the dollar.
And you know who will suffer if more people are able to basically keep phones for free? Not the carriers. They'll just jack up prices for everyone to offset the additional losses. You think they're just going to eat the cost themselves?
Why would a carrier give someone a phone if they have bad credit? It's not like they are mandated by law to provide everyone the latest iPhone regardless of credit score.
I worked in customer support for Rogers(A Canadian phone carrier) for a very short period before it was mandated to have unlocked phones and people still stopped paying their bill even if the phone was locked. The vast majority of people want to pay their bills on time especially for something as critical as phone service. The people who don't, are going to not pay their bill no matter what sort of rules in place because they either simply don't have the money or they don't care.
> Why would a carrier give someone a phone if they have bad credit?
Because phone locking means they're much more likely to pay it off, and so an unprofitable customer segment becomes a profitable one. Everybody wins -- the carrier doesn't lose money, and more people get phones.
> The people who don't, are going to not pay their bill no matter what sort of rules in place
That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.
> That's simply not true. If it were, then carriers would never have bothered with the administrative overhead of locking phones in the first place. People do respond differently to economic incentives like whether their phone will turn into a brick or not -- that's Econ 101.
Well its not like they have to individually lock each phone they sell by hand and your phone does not turn into a brick if its locked to a carrier. Yes definitely the functionality is drastically reduced but there are also people/services that will unlock your phone for you that don't work for the carrier. Maybe if the phone actually was unable to be used at all if it was locked and you didn't pay the bill, that would be a valid argument.
I can't really agree with just because they do it, it must work argument, I have, and I'm sure you have too, worked for a lot of companies that had policies or practices that did not work.
I worked in customer service for Rogers, a large telecom in Canada before unlocking was mandated. There were lots of customers that did not pay their phone bill despite their phone being locked. If people don't have the money (whether it be their fault or not) they aren't going to pay their phone bill no matter what sort of incentive you give them.
Being able to use a second carrier without cancelling a contract with the first is useful for international travel; the 'roaming' rate is often much higher than the normal rate of other countries' local telcos. Plus, mixing-and-matching plans can be advantageous to the user in certain situations even within one country. For example, data-only plans are typically cheaper than data+calls, but one might still want a very modest calls plan for infrequent use - sometimes, better value can be attained by combining two separate contracts. Of course, whether or not telcos ought to allow such use of their contract handsets is another question entirely!
If there’s a big enough market for this use case, I suspect at least one carrier would do so. I’d imagine this would include some sort of payment in escrow, temporary unlock feature, or an optional add-on.
Otherwise, folks in this position should just buy the phone outright and unlocked so they don’t have any issues like you’re describing.
The carriers getting screwed is the point here. The sooner their anticompetitive behavior backfires on them the sooner they'll stop doing it.
Simple. Since the major carriers these days offer "interest free installments" on phones, with subsidies or billing credits to make the TCO cheaper... then when this happens, the carrier: 1) loses no interest payments, 2) may lose installment payments, but this is a credit risk anyway - onus is on them to assess risk to a point of acceptability to them, and 3) get to not pay out the subsidies or billing credit.
All this amounts to is an additional layer of securing a loan. And pre-emptively so. "You cannot unlock this device because others may abuse this."
Assess identity and credit risk better.
I have little sympathy for the carriers, after having to fight Verizon over the claim that I, living in Seattle, and being an AT&T customer for a decade with 4-6 lines and devices, somehow decided to go to El Paso and buy a phone at a Walmart on Verizon, run it up making international calls and let it go to collections.
After supplying their (onerous, tbh) info around identity, police report, current utility billing and such, VZW said "We are still satisfied that the debt is valid and belongs to you, after reviewing your documentation with documentation that was supplied when the account was opened". When I said "well, given that you have verified my identity, and given that you state that the documentation you have from the account says that it was I who opened the account, I'd like to see that documentation". Verizon: "We cannot provide that data to you as it may violate customer privacy". Schrodingers account holder. It's me when they want to collect money, it's not me when they're concerned about sharing "someone's" info or billing records...
The counterpoint is that by locking people into carrier relationships allows T-Mobile and AT&T to offer loans on consumer electronics at much more consumer-friendly rates than others in the same business, e.g. Rent-A-Center. As I note downthread, `The total cost to buy a PS5 Slim is $500, the total cost to get a PS5 Slim through my nearest Rent-A-Center is $1,349.50.` You could introduce this pricing for iPhones for poor people too! This might even incentivize more people to use low-end Android hardware! But let's not act like this is 100% a good thing for everybody.
> The counterpoint is that by locking people into carrier relationships allows T-Mobile and AT&T to offer loans on consumer electronics at much more consumer-friendly rates than others in the same business
How does it do that? Its a lock to force people to stick with a provider, and pay through the nose in other ways. Phone plan rates in the US are terrible, restricting peoples ability to change provider through artificial means doesn't provide better rates.
Because it greatly lowers the risk that AT&T will need to write off the debt for your phone and sell it to a collections agency for pennies on the dollar.
It’s the same difference as a home mortgage vs unsecured credit card debt: When the threat exists that the lender can repossess your home if you don’t pay… they don’t have to worry as much about you not paying your mortgage, so they can offer a much lower rate.
Maybe then they should put a lien on it and call it the phone title, not lock status.
The cost to repossesses and resell a phone is going to greatly exceed its value in nearly every case, so this idea wouldnt work.
One of the main goal of a lien is to make sure that the debtor pays. I would say the locking mechanism helps that greatly.
You buy a phone for $1k, but you do it through your carrier, along with a $50/month plan. Because you’re on this plan, the carrier offers $600 off the phone price, paid in account credit over 24 months ($25/month), so your total monthly bill becomes $67/month for 2 years, then $50/month at the end of 2 years.
If, 3 months in, you find yourself unhappy with your carrier, you can still pay the remainder of your phone cost ($875) to own your phone outright and walk away. In that time, you’ve saved $75 off the full price of the phone.
Arguing that US carrier prices are exorbitant is not relevant to whether carrier locks and phone discount credits are worthwhile or cost effective.
I'm not sure what that has to do with locking your phone.
If you have a line of credit for the cost of a phone, then you have a line of credit for the cost of a phone. If you have a contract for service, them you have a contract for service.
If you try and terminate either then they will reclaim based upon your contract with them.
And the lock is collateral against a small, high-demand object that can easily be fenced. The phone lock is essentially the same as a hold against a car title until it’s paid off.
This would only be a real problem if there were no options to buy phones direct/outright without the lock. Instead, we’re likely to end up in some situation where carriers work with phone manufacturers to implement a sort of higher-level device lock feature that stipulates the device “belongs” to the carrier and can be functionally locked (a la the stolen device lock features that currently exist) if they ever go unpaid.
I used to have ATT for a little over ten years. I upgraded many phones with ATT next, etc. The final straw for me was when they said they never got the phone I sent back and billed me 1k or something. I saw the tracking number show it was delivered to a warehouse. Their organization/inventory is a joke.
Can't they do the same thing with statement credits? I got a Pixel on Google Fi that was $X and over the next 24 months I will get a statement credit of $X/24, so after two years it will be "free" if I stay with Google until then. Otherwise, I paid the difference.
Consumers, especially lower-income ones, mostly look at the sticker price. Paying upfront and getting a discount later is the opposite of what they want and carriers know this.
What do you mean? This is what they’re doing. “Switch to [carrier name] and get the iPhone 16 Pro on us!” Then it’s explained that it’s all statement credit to cover the purchase price over X months.
There's two ways "statement credits" can work (which is a little confusing).
A. Pay money upfront and get a discount every month.
B. Pay nothing upfront but the service is full price. (This is what I see on the T-Mobile site.)
My point is that many people prefer B even if the total cost is higher.
Right. I know of no consumer products that are sold using way “A” as you describe it.
Google Fi apparently because Google always has to be different.
Holy shit is that how that works? To be fair, it does say $500 back over 24 monthly bill credits, so it’s not overly misleading.
Not trying to move goal posts though. You’re right about that one and it’s pretty shitty.
What is good for our shareholders is also good for our users. Because they should buy our stock.
>Wolf, coyote oppose pasture rule, claim cramped coops are good for chickens
Then AT&T and T-Mobile will have no problem in providing firmware that is comparable to the duration achieved by LineageOS, with significant punishment should they fail.
Even with a network lock, that product would be far more valuable than what is currently sold.
I guess it makes sense if you have not paid off the phone, but after you paid off the phone and own it, its yours, and should be able to use it with any carrier.
But I dont see how its good for users, locked phones only help the business.
The article mentions different forms of fraud and arbitrage. Other than “buy phones with stolen credit cards”, what fraud schemes do people run? How much of a difference would a 90-day deadline make?
I’m willing to accept the risk
Considering AT&T is basically an arm of the US government at this point i'm sure theres some infighting going on.
The deal here is that if you commit to paying $xx/month for a year they will give you $yyy off a phone. It's not unreasonable but it's phrased in a deliberately confusing way to trigger cognitive biases in customers. Letting people break the contract after two months breaks this business model, so they simply won't offer it any more.
Even more of a reason to advocate for it.
I'm a fan of the large discounts I get from the carrier. If I have to be locked to the carrier for the duration of the agreement for that discount, then that's fine with me.
I mean unless they would keep those discounts without being locked, but I don't ever see that happening.
How about just offering it both ways. Discounts if you are OK being locked to the service for the duration, or no/lesser discount to be able to leave the service early. That way everyone is happy?
I mean, you can already just forgo the rest of the discount and get unlocked whenever you want, so I don't really see the problem I guess.
The locking was supposed to be a lien mechanism for phones so that the carriers could protect their investments. However, unlike a bank, they can continue to benefit from customers after the loan is paid off. So, they just keep the phones locked and make you go through elaborate hoops just to keep you as a customer instead of providing a good service.
If the carriers are not allowed to subsidize devices, there will be easily thousands of financial institutions who would provide these services.
I have always bought a locked phone with a discount from ATT and have never had any issues with them unlocking it after the term was up.
I enjoy the discounts, I don't know what else there is to say about it.
> If the carriers are not allowed to subsidize devices, there will be easily thousands of financial institutions who would provide these services.
How would a financial institution subsidize a phone without losing money on the deal?
Just like the carriers, by allowing you to pay in installments.
Let’s call it what it is, it’s a carrier financed credit with a lien on the phone. It’s practically a secured credit line and they don’t want to let it go.
The funny thing is none of this would happen if they removed the lien (lock) right after the loan was paid off.
With the carrier the subsidizing the phone is tied to you using the carrier's phone service for 2 or 3 years. The money they make on that makes up for whatever subsidy they gave on the phone.
With a financial institution that subsidizes your phone what other service will they charge you for to make up for the cost of the subsidy?
Resellers don’t pay the sticker price, they buy the phones with a discount and they’re sure to charge a premium or interest.
I’m not saying it’s going to be either faster, better, or cheaper. The carriers are like a cartel that is abusing the phone locking system and should face the consequences. As the things are right now, they’re even locking unlocked phones to their service with immunity and individual users cannot effort to sue them or even worse users are not even allowed to sue them because of forced arbitration clauses. Should nothing change in this system because it benefits a certain range of companies?
You can get the discount and an unlocked phone by purchasing directly from Apple and utilizing a carrier deal
I don't see how I can do this based on the details of the carrier deal.
In the sense that being unable to discharge student loans is good for users, I presume.
Something something unfair to those who paid. Something something economy.
Well life isn't fair and it's about time the not-rich benefitted from that sentiment.
And I wonder if part of the US deficit comes from this horrible model of non-bankruptable loans given in the tune of 6 figures per individual that can never reasonably be paid off by most jobs. It's sure not like the public sector (you could at one point also provide 10 years of labor to pardon a loan) didn't fall into the same crap shoot of today's job market. So even that's not guaranteed way to stimulate labor.
I paid my loans off in 3 years. I'm all for a reset to this model and forgiveness to those stuck in it.
More blatant Clickbait garbage by the unreadable Ars Technica.
No, the carriers did not say anything of the sort - they said locking the phones keeps the price of handsets low, and that customers like cheap handsets.
The moral of the story is never buy your phone from the carrier. Buy it direct from the manufacturer and you won't have to deal with this drama.
Or better yet, buy your phone from the used market. Get a phone in perfect shape that was $800 two or three years ago for $200. Put a new battery in it.
Though I'm seriously considering going back to a $50 flip phone and enjoying the 2 weeks of battery life and general indestructibility. My current phone spends most of its time sitting on my desk doing nothing. It's hard to get excited about a newer and much BIGGER phone for $500 that will also spend most of its time sitting on my desk, doing nothing.
That's like telling someone to pay cash for a car, or not to finance their home. So many people can afford a monthly fee, but not the large one time payment.
It's not your finances, and it's not your place to tell someone else how to spend their money.
I'd argue that you should be seeking a used car if you're cost sensitive. That's sort of outdated advice in this absurd market, but the monthly payments for a car off the lot (new or used, if that's a thing) will probably be worse than saving that monthly payment yourself for 6 months and buying a beater to hold you over.
These are the same people often trading in a perfectly fine iPhone [n-2] for the latest iPhone n.
Lock or not, the main story is that there is no OSS baseband. Locking would not be possible if people had the ability to choose the baseband software that best fit their needs.
https://osmocom.org/projects/baseband/wiki/ProjectRationale
https://security.stackexchange.com/questions/64337/do-cell-p...
dude i am in africa right now. i want to give my phone to the security guard and it is locked by t-mobile. it is annoying to unlock. unlocked phones are already common, let's make them ubiquitous.
There should be a shortcut through our legal bureaucracy to punish obvious BS like this. The amount of time wasted to evaluate such stupid claims is surely huge.
I don't know about punishment being the norm, but I'd like to see an agency (perhaps a better-funded and more independent analog of the FTC Bureau of Consumer Protection) that is competent and efficient enough to legitimately earn a lot of deference. That is, they could issue a quasi-C&D "here's a handy step-by-step guide to avoid doing this the hard way (you dumbass)" letter and have any competent lawyer's default reaction be something like "they're almost certainly right and you'd be an idiot to fight this" instead of "here's how we can fight this".
Of course, that implies a system that places the interests of citizens at least on par with the interests of capital (and can conceive of those as distinct concepts in the first place), which is clearly communist crazy-talk.
It's all part of the proceedings. Even on the SCOTUS the dissenting option is allowed to be posted for why they went for the other decision.
Also, I don't think this response is really the same as an appeal. It's just another legal footnote to keep in mind if/when other parts of the court comes in to block this (as they are so likely to do this year. Can't let the working class have good things).
Well said.
T-Mobile's filing is shorter than the article: https://www.fcc.gov/ecfs/document/1017178290200/1
> T-Mobile estimates that its prepaid customers, for example, would see subsidies reduced by 40% to 70% for both its lower and higher-end devices, such as the Moto G, Samsung A15, and iPhone 12.
This is such a confusing line, you're in control of that. Also if that were true this would be great for you. Don't you want to be making more money? But in practice can you not just enforce this by contract? You must make a 12 month commitment to T-Mobile to qualify for discounted phones.
In the pre-paid market niche, you have people who really struggle to put together the money for an iPhone 12 all in one go, and T-Mobile has essentially worked to create a razors/blade model with some obfuscation. It's possible that disaggregating phone plans from installment pricing would benefit consumers in the long run, but let's not act like everybody would be prepared to transition to that world immediately. (I don't think T-Mobile is exactly concerned for their customers, but this subsidy regime exists for a reason.)
I buy prepaid specifically so that I can own my own unlocked phone and be able to do what I want with it without thinking about the carrier. Price isn't the issue, ownership is.
OK, but you are in a tiny, tiny minority of customers that care about that distinction.
I am betting you are a fairly unique prepaid customer.
There's hundreds of us! I pay $15/month (+tax) for my service which has more than enough for my use most of the time. I don't get all the cross-promotional stuff, and I don't get a phone subsidy, but I think the lowest advertised price for all that stuff us $40/month. Saving $300/year gives me plenty of phone allowance, and I can buy my own tacos or whatever.
I don't have to pay for 'activation' when I move the sim from my phone into a new phone either, even though I hear about that happening still.
I don't have to try to get all my family lines on the same carrier either, so if the three of us are in a car stuck on the side of the road, we have a better chance of one of our phones working to get assistance.
But you can do the exact same thing with a postpaid plan.
That actually makes some sense and (I assume) you can let the service lapse and keep the phone if you don't have the money right now?
It seems in both cases T-Mobile is making a bet that you'll continue to use their service in one form or another. Is there a reason if it was unlocked you would immediately switch?
Yeah, you can let the service lapse and resume it, you just can't take the phone elsewhere. T-Mobile is taking on some risk there, to be sure.
As far as why you would immediately switch -- T-Mobile is not losing money on these phone subsidies in the aggregate (they are in some cases, to be sure). They're pricing the subsidies into their carrier rates. If this went through, they'd likely have to cut the subsidies and engage in pure competition on pre-paid mobile rates. I know some HN readers read that last line and go, "good," but the fact of the matter is that people who are buying subsidized phones on pre-paid plans are generally poor credit risks generally and phones lose a huge amount of their value the second you open the shrink-wrap so they're not very worthwhile as security for a secured loan, so by unbundling these two, T-Mobile starts to compete with everybody else on rates for service and somebody else steps in to handle the leases on phones, and if you look at that market segment, the answer in the US as to who is most prepared to take over that business, the answer is _Rent-A-Center_. The total cost to buy a PS5 Slim is $500, the total cost to get a PS5 Slim through my nearest Rent-A-Center is $1,349.50. Again, I am sure that T-Mobile is not advocating for this out of charity, but I'm not as convinced as some around here that this form of unbundling would be an unmitigated good thing.
EDIT: And to your point of, well wouldn't pre-paid operators all switch to a contract model, I don't think "you can't get phone service without a contract" is what people who are advocating for this reform want, and the primary customer for a pre-paid plan is someone who is too large a credit risk to get a 12-month contract through someone else. I said primary customer, if you want to tell me you're a great credit risk but you're on prepaid as an ideological stance, just pretend I already know that about you.
>Is there a reason if it was unlocked you would immediately switch?
If there was a better price or promotional discount available from a competitor?
That’s a good thing people would stop overbuying phones.