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Cellular Phone Forum / Providers / ATT Wireless / August 2003It's not legal???
The concept of locked cell phones was a special condensation from the FCC. It was based on the idea that competition would improve and that locked phones would help get the cell phone industry soaring. Since that time, things have changed. There are far less cell phone makers, most of the carrier competition has died off, and there is a growing public demand for unlocked cell phones. Some folks believe that locked cell phones are illegal. On August 12 this consolidated law suit was given the go ahead... determine whether the carriers in question illegally bundle handsets with service...." (RCRnews.com) It would seem that some folks are presenting the view that locked phones are harmful to competition. I was surprised to see T-Mobile included in this lawsuit, as they tend to be more willing to unlock cell phones than any other provider. All five major carriers are listed in this legal action. So basically you're saying you wouldn't mind paying about $250-500 for a new cell phone. If you take away the subsidy lock from carriers then they cannot make back the revenue on the handset sail that they lost by getting you to sign up for it.. look at it this way...if this goes though then wireless handsets will just get more expensive for everyone!  SignatureThanx, N W wmbray@hotmail.com (William Bray) wrote in article <vkntmvn7ouv1fd@corp.supernews.com>: > The concept of locked cell phones was a special condensation from the > FCC. It was based on the idea that competition would improve and that [quoted text clipped - 16 lines] > > [posted via phonescoop.com - free web access to the alt.cellular groups] uhhhh... i don't know why people complain about locked phones. it's your choice whether you buy one or not. you can go to an attws store and buy a locked phone OR go to most indirect dealers and buy an unlocked phone. you'd have to be a complete fuckin idiot to buy a phone from att then dispute the fact that it's locked when unlocked phones are available in many other wireless retail locations. nlwalker1@aol.com (N W) wrote in article <vkoa9elcrrqdf@corp.supernews.com>: > So basically you're saying you wouldn't mind paying about $250-500 for a > new cell phone. If you take away the subsidy lock from carriers then [quoted text clipped - 30 lines] > > [posted via phonescoop.com - free web access to the alt.cellular groups] maybe that was a bit harsh. here in san francisco you can walk into most indirect wireless phone dealers and buy an unlocked gsm phone. that may not be true if you live in small town... in which case you may not have many options. nlwalker1@aol.com (N W) wrote in article <vkoa9elcrrqdf@corp.supernews.com>: > So basically you're saying you wouldn't mind paying about $250-500 for a > new cell phone. If you take away the subsidy lock from carriers then [quoted text clipped - 30 lines] > > [posted via phonescoop.com - free web access to the alt.cellular groups] I didn't know if it applied to locked phones, but CA is a whole different story. In most cases, you CAN'T buy unlocked phones in stores, especially when the dealer buys their inventory from the carrier. I think Verizon phones are generally unlocked, but haven't had anything to do with them for a while. > maybe that was a bit harsh. here in san francisco you can walk into most > indirect wireless phone dealers and buy an unlocked gsm phone. that may [quoted text clipped - 39 lines] > > [posted via phonescoop.com - free web access to the alt.cellular groups] >maybe that was a bit harsh. here in san francisco you can walk into most >indirect wireless phone dealers and buy an unlocked gsm phone. that may >not be true if you live in small town... in which case you may not have >many options. I don't buy that. Even if you are in a small town small towns have internet access and have mail and UPS/FedEx/Airbourne delivery. Anything that's available to a big city dweller is available to small town dwellers as well. - - - - - - - - - - - - - - - - - - - - - - - - - - To send an email reply send to GSMthemobilestandard (@) yahoo.com A. Top posters. Q. What is the most annoying thing on Usenet? This goes under the assumption that a fair cost for cell phones is $250-500. Which is wrong. If you are old enough to remember pocket calculators, you will remember that they were expensive as hell when they first came out. Then competition and large scale integration got into the picture. A calculator the size of a paperback that only did basic math functions was originally in the $250 range, then after a while you could get one smaller than a pack of cigarettes for $39.95 with every math and scientific function known to man built in. Cell phones are no different. Most of the features that used to take 20-30 separate circuits to get are integrated into a single chip these days. Manufacturing costs are way down due to such improvementsalong with mass production, and the real "cost" of a cell phone is probably along the lines of $35 each for ones with retail prices of $250-500. All it's going to take is a company that stops the Bullsh*t, and sells phones for a fair price instead of the inflated prices the Phone company says it is for this cookie to crumble. Phone "subsidies" are nowhere near the range they make them out to be. What company could possibly stay in business offering a phone for $50 that cost them $250? I was born on a day, but it wasn't yesterday. The ONLY reason there is phone "locking" is the same reason there is "contracts". And that is the FORCING of people to play by the phone company rules, which are only there to insure that once you catch on, you can't go somewhere else for better service, and have to put up with whatever limits THEY want you to. Ever wonder what could possibly cost $35 to "activate" a phone? They pay someone $10/hour to punch something into a computer that takes 5 minutes to do. The rest is profit that goes towards alleged "subsidies", and billion dollar corporate bonus's. There is no such thing as a free phone. There is also no such thing as it taking a years contract or more for the phone company to make up it's subsidy. When your phone breaks (under warranty or not), do you think it goes to a repair shop where they take it apart, and fix whatever the problem was and return it to you? NO, they try a couple of quick fixes, and then it goes into a pile for scrap, and they give you a "reconditioned" phone made out of the working parts of all the scrap phones. THEN they claim all those scarp phones at inflated value for a tax write off. (even if they used parts off of them). It's a total win-win situation for them. I'm tired of big corporations like the phone companies getting the government to pay for all their investments through tax write offs, etc. then crying about how they aren't making back their investment. If it wasn't profitable for them to do it, they wouldn't. And if you believe otherwise, you are a fool. > So basically you're saying you wouldn't mind paying about $250-500 > for a new cell phone. If you take away the subsidy lock from [quoted text clipped - 30 lines] > [posted via phonescoop.com - free web access to the alt.cellular > groups] damn, i got tired of reading the fictitious book you just wrote. wireless companies do actually sell phones for less than what they purchase them for. i assume you dont know people who own wireless stores, if you did they would inform you that cell phones are expensiv! the dealers are able to reduce the cost of the phone because they get a couple hundred in commision for selling the service. check a cell phone makers website and see what they will sell the phone to you at. now retailers do get wholesale prices for buying the phones in bulk... but you're very wrong if you think that a company like motorola that sells ther t721 for 350.00 is going to give a dealer a 300.00 dicount for ordering them in bulk. "GeoW" <noone@nowhere.com> wrote in article <uoX2b.6971$n94.3736@fed1read04>: > This goes under the assumption that a fair cost for cell phones is $250-500. > Which is wrong. If you are old enough to remember pocket calculators, you [quoted text clipped - 74 lines] > > [posted via phonescoop.com - free web access to the alt.cellular > > groups] > damn, i got tired of reading the fictitious book you just wrote. > wireless companies do actually sell phones for less than what they [quoted text clipped - 9 lines] > ther t721 for 350.00 is going to give a dealer a 300.00 dicount for > ordering them in bulk. And you are an idiot if you think that the manufacturing cost on that phone is much more than $50. I might go as high as $70. Think of generic drugs. "Viagra" will cost $15/pill. "Sodium citrfilate" (or whatever the generic name is, I forget) will cost $6/pill, yet they are both made by Phizer, probably both cost $4 to mfgr, and contain the same ingredients. You don't think that you are paying for the "Motorola" name? Do you know what monthly rent is per sq foot for a phone company store in a busy mall? If it wasn't for the "markup" they couldn't afford to stay open. So Pleeze, don't try to come off like there isn't massive money being made on all fronts. > And you are an idiot if you think that the manufacturing cost on that phone > is much more than $50. I might go as high as $70. Think of generic drugs. [quoted text clipped - 5 lines] > for the "markup" they couldn't afford to stay open. So Pleeze, don't try to > come off like there isn't massive money being made on all fronts. Your argument is crap. The 'cost' of manufacturing a mobile phone is incidental since no wireless provider makes their own wireless phones. It could cost $1 to make a phone but Nokia charges what the market will bear. >> And you are an idiot if you think that the manufacturing cost on >> that phone is much more than $50. I might go as high as $70. Think [quoted text clipped - 11 lines] > phones. It could cost $1 to make a phone but Nokia charges what the > market will bear. The argument is just fine, If they didn't sell the phones to the carriers, they'd go out of business even if they charged $2 for that $1 phone. Everyone is making a buck here. Which there is nothing wrong with. The point is that if it's a $30 phone to manufacture, The carrier isn't going to buy the phones unless they get them for $40-50, and can turn them around and sell them as a phone "listed" at $250 for $100. Then, just because they like you, will throw in a $50 instant rebate, and you pay only $50 for that $250 phone. (strangely enough, the original cost of the phone from the mfgr) I'm making these numbers up for the sake of the discussion and have no inside knowledge of what the actual prices are down the line, but if you truly believe that the carrier is giving away phones at an overall loss, then I'm not the crazy one here. > > Your argument is crap. The 'cost' of manufacturing a mobile phone is > > incidental since no wireless provider makes their own wireless [quoted text clipped - 14 lines] > truly believe that the carrier is giving away phones at an overall loss, > then I'm not the crazy one here. No, it's not fine. You are arguing that generic Viagra costs less than brand name Viagra and what you are paying for is the 'name'. You also state that Pfizer makes both versions. How can this possible correlate to the wireless industry? AT&T does not make a handset. They buy them from Nokia. What do think is the least costly phone from Nokia? If AT&T's cost is $20 or $30 or $40 and they charge $50 or $100 online then give them away free (with an instant rebate, or even a mail-in rebate) where is AT&T's profit on said handset? >>> Your argument is crap. The 'cost' of manufacturing a mobile phone >>> is incidental since no wireless provider makes their own wireless [quoted text clipped - 25 lines] > rebate, or even a mail-in rebate) where is AT&T's profit on said > handset? The point I was trying to make is perceived value vs actual value. The issue in the Viagra example is that they make both the generic, and the brand name. It costs the same to make each pill, but the retail price on the Pfizer brand is higher than the generic brand. Both pills cost the same to make, so why don't they price them the same? Simple because they can. The same way that Nokia can make a phone that costs them $30 to make and they retail price it at $250. Because they can. In Outer Mongolia, or somewhere else, that same phone may retail for $100. Because they price it on what the market will believe. That has nothing to do with what AT&T may or may not pay for it for distribution. Let's say AT&T buys them under contract for $45 each. The retail price on them still states it's a $250 phone, so AT&T sells it discounted for $200, with a $150 "instant rebate". The final cost to the customer is $50, or just about what AT&T paid for it. They neither make nor lose any money on the transaction, and they contract you for a service which means around $500/year income minimum. It's the old Gillette theory. Sell the razor at cost, and make the profit on replacement blades. Without phone locking and contracts, they don't make any profit from the sale. >So basically you're saying you wouldn't mind paying about $250-500 for a >new cell phone. If you take away the subsidy lock from carriers then >they cannot make back the revenue on the handset sail that they lost by >getting you to sign up for it.. look at it this way...if this goes >though then wireless handsets will just get more expensive for everyone! If there is no incentive for you to stay with the company other than the legal contract that you signed, and you leave before that contract is over and stiff the cellular company you deserve to pay full price. The legality of the contract should be all that it takes to keep people tied to a cellular company and the cell phone could still be subsidized without any change to the way the cellular companies are doing business today - except that when your contract is up you will be able to take your cell phone to the competition (same technology of course). -- John S. e-mail responses to - john at kiana dot net > So basically you're saying you wouldn't mind paying about $250-500 for a > new cell phone. If you take away the subsidy lock from carriers then [quoted text clipped - 5 lines] > > N W That is true, however they won't have to make up the cost of the subsidy in the plan, so they could actually lower monthly rates. Tom Veldhouse I am saying no such thing. The cost of a cell phone is far less than you think it is- just think of the Nintendo game price scheme and you'll get the idea. This topic is about a court action and I have no part in it. This is an interesting court case. nlwalker1@aol.com (N W) wrote in article <vkoa9elcrrqdf@corp.supernews.com>: > So basically you're saying you wouldn't mind paying about $250-500 for a > new cell phone. If you take away the subsidy lock from carriers then [quoted text clipped - 30 lines] > > [posted via phonescoop.com - free web access to the alt.cellular groups] >Some folks believe that locked cell phones are illegal. Some folks don't now what they are talking about if the conversation is about the USA. There are some countries in Europe where it IS illegal however. -- John S. e-mail responses to - john at kiana dot net >On August 12 this consolidated law suit was given the go ahead... >determine whether the carriers in question illegally bundle handsets >with service...." (RCRnews.com) It would seem that some folks are >presenting the view that locked phones are harmful to competition. Damn this really ticks me off. F-ing lawyers messing with the cellular industry. That's all we need. Can't wait till we all have to shell out $300 for a basic phone with 3 year contracts to pay for this lawsuit. Doug > >On August 12 this consolidated law suit was given the go ahead... > >determine whether the carriers in question illegally bundle handsets [quoted text clipped - 7 lines] > > Doug Supply and demand will take care of it ... don't you worry. Raising the costs too high WILL reduce demand. Tom Veldhouse I find it interesting how this topic jumped into a debate about cell phone costs. So her goes a question in that direction. Do any of you believe that it really costs as much as you are paying to use that cell phone service? I would guess that by the end of a contract you have paid twice for the cell phone alone. To provide an individual with cell phone service the price looks huge, but we are in a mass market, with over 43 million users, both over phones and service, where the end results are good profits for the providers. How much is 43 million times 2 cents? "Thomas T. Veldhouse" <veldy71@yahoo.com> wrote in article <3f4d0ee6$0$159$a1866201@newsreader.visi.com>: > > >On August 12 this consolidated law suit was given the go ahead... > > >determine whether the carriers in question illegally bundle handsets [quoted text clipped - 12 lines] > > Tom Veldhouse Welcome to my world of WAG estimation. The network costs for your service are somewhere between 4-8 cents per minute of use depending on the provider (compared to about 2 cents for landline). This includes maintenance, CapEx for network expansion, roaming, etc. Customer acquisition can be around $350-400 per customer for equipment subsidies, commissions, etc. Those are the only numbers I'm relatively certain of. I'd imagine it costs a fair amount for customer care per subscriber, as well. Just spread out the cost of acquisition over a one-year contract, and the carrier has to make at least $30-33 per month from you to break even. If you're on a $29.99 rate plan, they have to jack you up with features or other "value added" items to make you profitable, and hope that you don't cancel directly after your contract is up. $480/year on monthly service fees - $375 in acqusition costs - capital expenditures - customer care costs = not making back 2x what it cost to sign you up in the first place. Or look at it another way. AWE last year spent $5 billion on their network. They had about 20 million subscribers. That's what, $250 per subscriber they spent on network expansion alone. I'm not saying that all of these numbers are 100% accurate, I'm just saying that the carriers won't be making the big profits for a long time; at least until they can get their network costs down close to landline levels and they figure out a way to stop subsidising new customers. Imagine if SBC or Verizon promised you a free answering machine, phone and free long distance with all their new landline additions. > I find it interesting how this topic jumped into a debate about cell > phone costs. So her goes a question in that direction. [quoted text clipped - 7 lines] > profits for the providers. > How much is 43 million times 2 cents? |
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