Wireless carriers have traditionally made money off lengthy two-year service agreements, rather than physical device sales. In the age of smartphones, however, carriers are footing the bill for expensive handsets that result in smaller margins, while phone makers such as Apple reap the benefits. To combat traditional phone subsidies, carriers in the U.S. have continued to raise monthly rates and employ new and higher fees. In Europe, service providers are taking more aggressive measures, with some carriers refusing to subsidize devices for new customers. The carriers’ latest cries of resistance are drawing applause from investors and analysts alike, who say carriers could benefit more from the smartphone boom if they raise contract prices and slow the rate at which customers buy new phones. More →
Here’s what Big Red is working with: they’ve offered up a BOGO sale on all new BlackBerrys for the holiday buying season, and where some see a great deal, others see a great opportunity. Why not play a game of Flip My BlackBerry? Why not open a second line, get a brand new Tour or Storm 2, pay the cancellation fee on the new line of $175, and sell the device on eBay for $300 or more? Well it looks like Verizon has finally caught onto our the little game. A new connect has emerged with a few documents and it looks like starting on November 15th Verizon will be charging up to $350 as an early termination fee on “advanced devices.” This new “improved” fee does have a minute silver lining (if you can even say that): for every month of service completed, the $350 sum will decrease by $10. No word yet on what an “advanced device” constitutes but we can use our imaginations to figure it out. What do you think? Anyone considering abandoning plans to buy the DROID after hearing this news, or are you just going to get yours before November 15th? Or will you actually be an honest person and actually honor the contract you sign?
Your phone is beaten down and the battery doesn’t last more than a few minutes – or there is a pretty new gadget and it has everything you could possibly want, even though your current phone is perfectly fine. In either of these situations, if you were eligible for an upgrade, it was sweet as icing to know you’d get your new device at a subsidized price. However, as if it didn’t hurt enough that you had to sign a new contract, there’s that annoying “upgrade fee” to deal with and it always stung just a little. What on earth compels a carrier to charge an upgrade fee?! We’re glad that T-Mobile is abandoning that silly practice because it’s a total insult when they say, “Hey, thanks for sticking with us for another two years and buying a brand new phone, but we’re gonna have to charge you extra for that.” Goodbye $18 slap-in-the-face fee!