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With the White House having given its support to legalizing the unlocking of cell phones, Sen....

With the White House having given its support to legalizing the unlocking of cell phones, Sen. Ron Wyden has introduced a bill that would do just that. Passage of the bill could lead to a bump in churn for U.S. carriers, as consumers are no longer required to buy a new phone (and, should they want a subsidy, agree to a contract) to switch carriers. However, some phones only work on a particular carrier's network due to band compatibility issues, and carriers could start requesting more such devices in an effort to keep customers from leaving.
Comments (14)
  • Tack
    , contributor
    Comments (12726) | Send Message
     
    This kind of "do-gooder" legislation will just result in higher front-end costs for phones for all consumers, as carriers will have less incentive to subsidize.
    6 Mar 2013, 12:01 PM Reply Like
  • JOHNTBAKERJR
    , contributor
    Comments (59) | Send Message
     
    Agree for sure. This could eventually result in the end of subsidies and certainly put Apple at a competitive disadvantage. The question will become though, how will the carriers retain customers in other ways. Besides network incompatibility issues, perhaps "good customer" bonuses, like insurance companies use....two years for a phone purchase subsidy and then to keep customers from moving, offer longer term binding agreements for data services at reduced prices. Of course this approach would just mean higher data plan costs for those who DON'T sign the agreement. Frankly coverage is the controlling issue for many people, regardless of the cost. If you can't get service at home, then a reduced rate becomes immaterial. Who knows where this government meddling will lead. Congress' ability to help me is actually very limited, based on recent performance!! :~)
    6 Mar 2013, 12:41 PM Reply Like
  • Tack
    , contributor
    Comments (12726) | Send Message
     
    John:

     

    As Ronald Reagan famously and aptly stated, "the nine most feared words in the English language: 'I'm from the Government, and I'm here to help.'"
    6 Mar 2013, 12:47 PM Reply Like
  • rob123
    , contributor
    Comments (144) | Send Message
     
    Not "do-gooder," rather long overdue legislation, in my opinion. Currently, phone unit prices are bloated and most consumers do not realize it since the cost of the unit is spread over time! It is great for phone churning consumers but not for the long-term phone keepers who end up subsidizing the churners!

     

    Only in the US do we have these primitive contractual strangleholds that lock consumers into these monopolistic contracts by the telcom giants. The rest of the world has always gone by a pay-as-you-go scheme which is the way it should be, in my opinion. That way, costs will be purely market driven and therefore true capitalism.

     

    According to the latest news, Apple is seeking to sell the iphone for prices that are affordable in Asian and African markets - which are the only cell phone markets left to achieve meaningful growth numbers! In order to avoid having significantly different prices for the same product across different countries they are opting for the next best thing - pushing carriers to switch to pay-as-you-go in the hopes of bumping up sales both here and abroad.

     

    We'll see how it all plays out....
    6 Mar 2013, 12:50 PM Reply Like
  • Tack
    , contributor
    Comments (12726) | Send Message
     
    You better go check phone prices in these "enlightened" markets. You'll be in for a rude surprise.

     

    And, how are contract phone users subsidizing "churners?" Anybody ,who doesn't take a contract or how wants to upgrade before contract expiration, pays through the nose for a new phone.
    6 Mar 2013, 12:55 PM Reply Like
  • rob123
    , contributor
    Comments (144) | Send Message
     
    Because the cost of the phone is factored into the monthly usage bill for your "free" or "subsidized" phones! There is no free lunch my friend!

     

    After the phone company has recouped its subsidy (typically in 2 years), if the customer has not opted for a new phone, it is free money month after month for the phone company, because they DO NOT lower your bill now that the phone is "paid off!"

     

    You "pay through the nose" only because the phones are currently not priced by fair market value. Rather they are deliberately priced in a lop-sided fashion to steer consumers towards contracts which offer "free" and subsidized ones which naturally appear as a better deal.

     

    Watch monthly plan rates drop (in addition to unit costs) as soon as phones are sold on open market.
    6 Mar 2013, 01:17 PM Reply Like
  • dnorm1234
    , contributor
    Comments (828) | Send Message
     
    >"Only in the US do we have these primitive contractual stranglehold"

     

    Pretty sure we have it worse here Canada.
    6 Mar 2013, 08:35 PM Reply Like
  • easyrider13
    , contributor
    Comments (4) | Send Message
     
    thank you Rob123. right on!
    6 Mar 2013, 11:32 PM Reply Like
  • JOHNTBAKERJR
    , contributor
    Comments (59) | Send Message
     
    Rob....nor do they RAISE your bill when the phone is new! It's not a subsidy...it's a loss leader. They do NOT directly recoup the cost of the subsidy. "Loss leader" is quite different.

     

    I do agree that data plan prices will drop if phone prices go up....and I also agree that phone prices should stand on their own. This would hurt Apple however, since their premium hardware price would not be justifiable by a large block of consumers. Since Apple phone users are generally heavier data users, perhaps the phone companies will have an incentive to offer data plans to them at lower prices?
    7 Mar 2013, 10:35 AM Reply Like
  • Terry330
    , contributor
    Comments (866) | Send Message
     
    President is always looking out for 95% of Americans.
    6 Mar 2013, 01:18 PM Reply Like
  • BCohen1983
    , contributor
    Comments (2) | Send Message
     
    Good! Now we need to see more hardware like the Qualcomm RF360 (global mult-band LTE). If they start selling devices that work on multiple networks companies will have to retain subscribers based on their service alone. Service will have to get better, cheaper, or both.
    6 Mar 2013, 01:18 PM Reply Like
  • romilar
    , contributor
    Comments (625) | Send Message
     
    @Johntbaker,the end of your comment reminded me of the ten words I fear hearing the most.."I'm from the government and i'm here to help you".....Rom
    6 Mar 2013, 05:44 PM Reply Like
  • JOHNTBAKERJR
    , contributor
    Comments (59) | Send Message
     
    That's indeed what I was trying to say! Bless their hearts...they try, dammit!
    7 Mar 2013, 10:37 AM Reply Like
  • easyrider13
    , contributor
    Comments (4) | Send Message
     
    thank you Rob123
    6 Mar 2013, 11:30 PM Reply Like
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