The American Cell-phone saga - a new era dawns
It's been a while since my last rant about the stupid model by which Americans get mobile phones and wireless plans. Part of this model is driven by the fact that our wireless carriers here have really strong lobbies in Congress, so they do everything they can to protect their vested interests in NOT having an efficient market. CDMA, LTE, UMTS, HSPA+, EDGE,GSM... I don't even try to keep with all the variations in technologies used in this country, but that's one of the things that locks people into a particular carrier. Technically there are 4 major carriers in the US, but since there are really only two main technologies deployed, what we really have is 2 pairs of carriers, and even within those pairs they've done what they can to make it useless to switch. In Europe and Asia, any phone works on any network. It's wacky.
The other big difference of course is this subsidy/contract model. Americans tend to sign two year contracts for their phones, and part of the monthly fee they pay is actually a subsidy for the handset they use. So they think they're getting an iPhone for $199 instead of the full retail $699, but all they're really doing is signing up for an iron-clad contract where they payoff the other $500 over the course of 2 years. American's don't think about it this way - they think they're getting an iPhone for $199, and that their generous wireless carrier is going to "let" them upgrade two years from now. In point of fact all the carrier is doing is offering them the opportunity to sign away their freedom of choice for two more years when the initial contract expires. What a deal! The result? 33% of Americans now use pre-paid (no-contract) phones.
Three years ago I bought my first phone, a Nexus One. I loved it. I still have it as a backup phone. Google engraved my name on it. I've used it on AT&T, T-Mobile, Tata Wireless, Vodafone, Orange, O2 and KPN. I still take it with me to Europe sometimes. I paid $500 for it. The Nexus is an Android phone, and it got all the updates for 2 years until its hardware became out-dated. After that I bought a Nexus 4, and it's serving me equally well.
Now, 3 years after I adopted this model myself, the major wireless carriers are coming along. T-mobile has lowered its rates and no longer offers contract plans. You literally cannot sign a service contract with them anymore. Bring your own phone, or finance one, but they're not subsidizing it. And they lowered their rates. $50/month gets most users all the data they'd ever need, and my 4G LTE signal here in Lexington is sometimes 3X, even 4X what I get from our cable internet provider. True, T-mobile doesn't have the coverage that the big guys do, but it's improving, thanks largely to the $1 BILLION payout from AT&T when a recent merger attempt failed. So be a smart consumer and at least shop around and know your options before blindly signing up for a contract just to get a phone. There are a lot of pre-paid and virtual network operators now - you can get your phone service at Wal-Mart of Kroger, and it's probably a better deal than what you can get from AT&T or Verizon.
The other big difference of course is this subsidy/contract model. Americans tend to sign two year contracts for their phones, and part of the monthly fee they pay is actually a subsidy for the handset they use. So they think they're getting an iPhone for $199 instead of the full retail $699, but all they're really doing is signing up for an iron-clad contract where they payoff the other $500 over the course of 2 years. American's don't think about it this way - they think they're getting an iPhone for $199, and that their generous wireless carrier is going to "let" them upgrade two years from now. In point of fact all the carrier is doing is offering them the opportunity to sign away their freedom of choice for two more years when the initial contract expires. What a deal! The result? 33% of Americans now use pre-paid (no-contract) phones.
Three years ago I bought my first phone, a Nexus One. I loved it. I still have it as a backup phone. Google engraved my name on it. I've used it on AT&T, T-Mobile, Tata Wireless, Vodafone, Orange, O2 and KPN. I still take it with me to Europe sometimes. I paid $500 for it. The Nexus is an Android phone, and it got all the updates for 2 years until its hardware became out-dated. After that I bought a Nexus 4, and it's serving me equally well.
Now, 3 years after I adopted this model myself, the major wireless carriers are coming along. T-mobile has lowered its rates and no longer offers contract plans. You literally cannot sign a service contract with them anymore. Bring your own phone, or finance one, but they're not subsidizing it. And they lowered their rates. $50/month gets most users all the data they'd ever need, and my 4G LTE signal here in Lexington is sometimes 3X, even 4X what I get from our cable internet provider. True, T-mobile doesn't have the coverage that the big guys do, but it's improving, thanks largely to the $1 BILLION payout from AT&T when a recent merger attempt failed. So be a smart consumer and at least shop around and know your options before blindly signing up for a contract just to get a phone. There are a lot of pre-paid and virtual network operators now - you can get your phone service at Wal-Mart of Kroger, and it's probably a better deal than what you can get from AT&T or Verizon.
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