AT&T apparently really does not want to sell you a cell phone without a contact. (See this image if you want to try to figure out what I’m talking about)

The price with a 24-month contract for an HTC Fuze Black phone is $175 after rebates. If you want to buy the phone for your existing account, it’s $510. Activation fee is $36. Early termination fee of a contract is $175. The contact that you have to get with the phone is $60.

So if you go out, purchase a cell phone with a new contract ($175), activate it (175+36=$211), pay for the first month ($212+60=271), then cancel service ($271+175=$447), you still come out ahead of where you would if you just bought the phone without a contact extension. Of course, there are some sales taxes involved, but not $60 I don’t think. Plus you’d get an extra 900 minutes and an extra phone for a month!

I figured that AT&T was just jacking up the retail price to pressure you into signing a contract, but their $510 is actually less than the cost of the same phone on Newegg (except the Newegg phone you can take to another cell phone company). The main reason for that likely being that Newegg’s is unlocked but with AT&Ts you can only use it with AT&T unless you unlock it yourself. Even so, though, it suggests that the AT&T full no-contract price is not wholly unreasonable but that they’re willing to cut it that much if you’re some combination of (a) willing to stick around for two years, (b) don’t know how to unlock a phone, and/or (c) are unable to perform the arithmetic

I’m perfectly happy with my Smartphone, but since B and C don’t apply to me, I know what I’m going to do when I want a Fuze (unless I go with eBay again).

Category: Market

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3 Responses to Cell Phone Economics

  1. Linus says:

    I’ve wanted a more capable phone for a while, especially because we use our phones for internet access and currently only get dial-up speeds. But even if it gives us broadband speeds, the $60/mo data plan is just more than I’m willing to spend. $120/mo for two smartphones when we get by on our current plan at $60/mo? That’s $720/yr, plus the cost of the phones – I’ll pass.

  2. trumwill says:

    If you get two phones, you may get a price break. I assume that if you’re currently paying $60 for two phones that there is some sort of price break involved currently. Could be something to ask your local outlet (or a phone bank).

    Another option might be to have one phone on a data plan and the other not depending on how you spread the usage. Or maybe it works out so that you get one data plan for the two phones where you share bandwidth sort of like how my family shares minutes. These are things I don’t know.

    Do you still have that old Pocket PC? Even without the data plan, one thing to consider would be to get a smartphone in order to consolidate the two. I resisted the idea for a while because the two devices did the job, but now I’m rather glad that I did because it assures that my “Pocket PC” is on me at all times. That wouldn’t help with your Internet setup, though.

  3. trumwill says:

    Linus, I checked with AT&T’s account manager and here is how it would work if you were getting an account in Colosse (may be different where you are):

    The basic rate would be $50/mo for the cheapest plan (500/3500 minutes) or $70 for the next one up (700/unlimited+in-network). That would be for both phones. Unlimited data minus testing would be an additional $30 per phone. So if you wanted it on both, you’d be looking at about $120 or $140 per month. If you only wanted the data on one of the phones, then it would be $80 or $100.

    This is assuming that they don’t honor the special pricing in the ad, which is actually a better deal than they offer existing customers. The cheapest plan for existing customers is $40+30 for a single phone and that’s more than the $60. However, on AT&T you can add a second line for $10 ($40 for second line and data). If they were to let you do that on their plan, that could have you working off $70 per month with one data phone for $100 for two. You’d have to talk to an AT&T rep about how they would handle that.

    So yeah, even in a best case scenario it’s going to cost you more than you are paying now and it could end up costing you twice what you currently pay. That is pretty steep if you don’t plan to use it often. I might consider adding data so that I could stream media from my file server at home to my phone anywhere, but I’m not sure that’s worth $30 to me when I can just copy it to MicroSD. On the other hand, it could be worth it to you if you really wanted an upgrade on your home Internet. Though from what I recall, you like your current spartan arrangement and view the limitations on your surfing as a good thing. I wish that I viewed things that way :).

    I am *assuming* that if you signed the contract they would honor it for both phones and not charge you $60 per line

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