Results 1 to 15 of 50
- 05-13-2005, 10:13 PM #1let_it_rideGuest
Just throwing this out, but do any of you out there think it would be better
to get a lower monthly rate than an occasional break on a phone ???
Seems like we are free phone driven, we can't see the forest for the trees.
But we do pay for those "free" phones in higher monthly charges, and
probably more than if we just bought our devices like we do with any other
utility. I don't expect my electric company to give me a free fridge, damn,
I can't afford them now, how could I afford them after that ?? My
understanding is that in Europe they don't discount the phones, but the
service rates are much less than here.
Anyway, what do you all think ????
› See More: Phone Discounts vs Lower Monthly Rates
- 05-13-2005, 11:15 PM #2Stanley ReynoldsGuest
Re: Phone Discounts vs Lower Monthly Rates
I think that the company would rather spend the money on marketing to get
more customers and rates would be the same if phones were not discounted.
But it would be nice to let the customer pick first 2 months free and no
activation fee or a cheap phone.
- 05-14-2005, 06:27 AM #3Bob SmithGuest
Re: Phone Discounts vs Lower Monthly Rates
"let_it_ride" <[email protected]> wrote in message
news:mVehe.79$4d6.62@trndny04...
> Just throwing this out, but do any of you out there think it would be
better
> to get a lower monthly rate than an occasional break on a phone ???
>
> Seems like we are free phone driven, we can't see the forest for the
trees.
> But we do pay for those "free" phones in higher monthly charges, and
> probably more than if we just bought our devices like we do with any
other
> utility.
Higher monthly charges? How so? Unless you have to bump up to $35/mo. plan
for taking the $150 minute plan, nothing changes on one plan.
> I don't expect my electric company to give me a free fridge, damn,
> I can't afford them now, how could I afford them after that ?? My
> understanding is that in Europe they don't discount the phones, but the
> service rates are much less than here.
>
> Anyway, what do you all think ????
I don't know whether those plans in Europe are that much cheaper. Especially
when converting the local currency to US dollars.
Bob
- 05-14-2005, 08:59 AM #4Isaiah BeardGuest
Re: Phone Discounts vs Lower Monthly Rates
let_it_ride wrote:
> Just throwing this out, but do any of you out there think it would be better
> to get a lower monthly rate than an occasional break on a phone ???
Well, the break is a lot more than just occasional. Believe it or not,
NO one buys their Sprint phone at full price. It just happens that
Sprint and other carriers are willing to offer MORE of a subsidy than
normal to new customers or eligible 18-monthers than current,
non-elligible customers.
If we did away with all subsidies, then the "full" price of handsets
could easily shoot up $75 to $100 what they already are.
A case in point is Nextel. They are probably the only wireless company
that doesn't subsidize the "full" price of handsets. And a phone with a
feature set similar to a $150 phone on Sprint will go for $275 on
Nextel. they can do this however, because they don't cater nearly as
much to individuals. They go after groups, businesses, people who must
have direct connect capability and are willing to pay through the nose
for it, even if the network underneath is sub-standard.
> Seems like we are free phone driven, we can't see the forest for the trees.
Unfortunately, this is a situation that cell carriers have dug
themselves into and can't really get out of. imagine the uproar if
people suddenly had to pay more,just because, when before they could get
a new phone and service for free?
There's also a psychological effect. People are more willing to get
sucked in with a "freebie" and pay little amounts that add up to huge
amounts over time, rather than have large startup costs up front and
lower continuing costs down the road. The Rent-To-Own industry is a
prime example.
--
E-mail fudged to thwart spammers.
Transpose the c's and a's in my e-mail address to reply.
- 05-14-2005, 05:16 PM #5Guest
Re: Phone Discounts vs Lower Monthly Rates
On Sat, 14 May 2005 10:59:00 -0400, Isaiah Beard
<[email protected]> wrote:
>>let_it_ride wrote:
>> Seems like we are free phone driven, we can't see the forest for the trees.
Phones aren't free. You pay for the phone in all cases, the monthly
and minute rate would be much lower if they weren't using the free
phone to get you signed up for a new contract. That is all the "free"
phone is: A mechanism to keep you under contract.
By keeping a stranglehold on the phone supply the only way for you to
get one is from *the carrier*. And the only way they will give you
one is if you sign a contract to pay them monthly for 2 years (except
Tmobile, 1-year). So they give you a phone that probably costs them
less than $50 and in exchange they have you under contract to pay them
$960, $1500 or even more over 2 years. Not a bad deal from the
carriers standpoint but it is hardly in the users best interest.
>Unfortunately, this is a situation that cell carriers have dug
>themselves into and can't really get out of. imagine the uproar if
>people suddenly had to pay more,just because, when before they could get
>a new phone and service for free?
That would never happen. If Motorola, Samsung, LG and Nokia were
duking it out in the market you would see great innovation and much
lower prices. I bet a very nice phone would cost $99 at retail with
the store markup. How much do you think it costs to make a 3.5 oz
phone in a factory in Mexico? $15? $25? Maybe. Not more than that
I assure you. Remember, the volume is HUGE. Maybe phone manufacturers
would sell you a phone with a years service included. Heh.
>
>There's also a psychological effect. People are more willing to get
>sucked in with a "freebie" and pay little amounts that add up to huge
>amounts over time, rather than have large startup costs up front and
>lower continuing costs down the road. The Rent-To-Own industry is a
>prime example.
The marketing. It's all the marketing. Bundling has resulted in a
large inflation of phone prices then they discount them if you sign
up. If that were illegal the market would take over, and everything
would be better. Lots better.
- 05-16-2005, 09:49 PM #6SSGuest
Re: Phone Discounts vs Lower Monthly Rates
"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> If Motorola, Samsung, LG and Nokia were
> duking it out in the market you would see great innovation and much
> lower prices. I bet a very nice phone would cost $99 at retail with
> the store markup. How much do you think it costs to make a 3.5 oz
> phone in a factory in Mexico? $15? $25? Maybe. Not more than that
> I assure you. Remember, the volume is HUGE. Maybe phone manufacturers
> would sell you a phone with a years service included. Heh.
You can assure us? Then tell me- where are the $100 computers made in
Mexico? After all, if a cell phone would only cost $25 to make, a basic
computer couldn't cost more than $75 to make. As far as your $25 claim
goes, here's something to think about- the CDMA processor alone costs much
more than that, even when bought in huge volumes.
> >
> >There's also a psychological effect. People are more willing to get
> >sucked in with a "freebie" and pay little amounts that add up to huge
> >amounts over time, rather than have large startup costs up front and
> >lower continuing costs down the road. The Rent-To-Own industry is a
> >prime example.
> The marketing. It's all the marketing. Bundling has resulted in a
> large inflation of phone prices then they discount them if you sign
> up. If that were illegal the market would take over, and everything
> would be better. Lots better.
Really? Care to explain the large losses recorded by every domestic
provider for consumer equipment subsidies each quarter? They're reported
out in the open and would have been exposed as scams a long time ago by a
whole bunch of people (independent auditors,press, competitors, FTC, etc.)
if they were not accurate. And these losses can only be taken if the
selling price is less than the cost of the product, not for simply selling
for a cheaper price (but above cost).
EVERY TIME someone has "assured" that the cost of these phones is much
cheaper than the industry claims, there has been a complete lack of facts to
support the statement- it has always been nothing more than an opinion.
After the hundreds (if not thousands) of claims just like yours, we still
have yet to see a single bit of proof to back the claim. Do you actually
have facts to support your claim, or do you simply represent today's best
guess?
- 05-17-2005, 09:43 AM #7Guest
Re: Phone Discounts vs Lower Monthly Rates
On Mon, 16 May 2005 21:49:57 -0600, "SS" <[email protected]>
wrote:
>
>EVERY TIME someone has "assured" that the cost of these phones is much
>cheaper than the industry claims, there has been a complete lack of facts to
>support the statement- it has always been nothing more than an opinion.
>After the hundreds (if not thousands) of claims just like yours, we still
>have yet to see a single bit of proof to back the claim. Do you actually
>have facts to support your claim, or do you simply represent today's best
>guess
Prepaid phones are not sold at a loss. Maybe no carrier profit but
there is surely retailer margin or they wouldn't be there.
Prepaid color phones at Target, $79. CDMA chip installed. Virgin
Mobile.
You can't get anything at Sprint for that, not without signing an
agreement to give them at least $863 for service over two years,
probably lots more.
If you think Sprint is actually giving you a *free* phone you are
naive. They might give you one, or sell you one and make you send for
a rebate (so they can get some "slippage"). But only for signing a
contract. Phones are not free, and they are not losing money on them.
That would be bad business.
- 05-17-2005, 09:52 AM #8Guest
Re: Phone Discounts vs Lower Monthly Rates
On Tue, 17 May 2005 03:08:46 GMT, Paul Miner <[email protected]>
wrote:
>On Sat, 14 May 2005 23:16:35 GMT, "[email protected]"
><[email protected]> wrote:
>
>>By keeping a stranglehold on the phone supply the only way for you to
>>get one is from *the carrier*. And the only way they will give you
>>one is if you sign a contract to pay them monthly for 2 years (except
>>Tmobile, 1-year). So they give you a phone that probably costs them
>>less than $50 <...>
>
>I'd sure love to see some facts backing up the claim of these
>so-called low cost handsets. I have a feeling the actual cost to the
>carrier is far more than $50 on average (across all current models),
>and WAY more than $50 for the high end models, probably as much as 10x
>that amount.
I'm sure it is. I am sure they have some models that cost them $50 or
$75 to buy. But if they put a $400 price on it and give you a $150
rebate for signing a 2 year contract they are *not* losing money.
That $400 phone certainly cost them less than the $250 YOU are paying
THEM. Heh.
All I am saying is they are keeping the prices of equipment
artificially high to keep their customers under contract, and unlike
how it was 2 years ago at Sprint current customers now have fairly
poor options compared to new customers-as far as equipment is
concerned.
With all the phones being carrier branded and sold only through the
carrier it results in artificially high prices and they are using that
fact to their advantage. By making you sign a contract to pay them
money for 2 years.
If the manufacturers were competing with each other on the equipment
you would see a natural decline in prices due to competition.
- 05-17-2005, 11:11 AM #9Bob SmithGuest
Re: Phone Discounts vs Lower Monthly Rates
"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Mon, 16 May 2005 21:49:57 -0600, "SS" <[email protected]>
> wrote:
>
> >
> >EVERY TIME someone has "assured" that the cost of these phones is much
> >cheaper than the industry claims, there has been a complete lack of facts
to
> >support the statement- it has always been nothing more than an opinion.
> >After the hundreds (if not thousands) of claims just like yours, we still
> >have yet to see a single bit of proof to back the claim. Do you actually
> >have facts to support your claim, or do you simply represent today's best
> >guess
>
> Prepaid phones are not sold at a loss. Maybe no carrier profit but
> there is surely retailer margin or they wouldn't be there.
>
> Prepaid color phones at Target, $79. CDMA chip installed. Virgin
> Mobile.
So, what's your point? Do you know for sure that these phones aren't
subsidized by Virgin Mobile, to Target ... or off Virgin's website as well?
Just where is your proof as to the actual cost of the phone? I don't see it
here ...
>
> You can't get anything at Sprint for that, not without signing an
> agreement to give them at least $863 for service over two years,
> probably lots more.
>
> If you think Sprint is actually giving you a *free* phone you are
> naive. They might give you one, or sell you one and make you send for
> a rebate (so they can get some "slippage"). But only for signing a
> contract. Phones are not free, and they are not losing money on them.
> That would be bad business.
Uh, yes, they are losing money on them initially. They hope to recap the
actual difference within 10 months of service.
Bob
- 05-17-2005, 05:50 PM #10SSGuest
Re: Phone Discounts vs Lower Monthly Rates
"[email protected]" <[email protected]> wrote in message
news:[email protected]...
>
> Prepaid phones are not sold at a loss. Maybe no carrier profit but
> there is surely retailer margin or they wouldn't be there.
Again, where's the proof? The more likely scenario is that the carrier pays
the retailer x dollars for each phone sold, just as they do for the calling
cards.
>
> Prepaid color phones at Target, $79. CDMA chip installed. Virgin
> Mobile.
And Sprint currently has 11 on their website priced cheaper than that with
many more features. Nothing has been proved.
>
> You can't get anything at Sprint for that, not without signing an
> agreement to give them at least $863 for service over two years,
> probably lots more.
>
> If you think Sprint is actually giving you a *free* phone you are
> naive. They might give you one, or sell you one and make you send for
> a rebate (so they can get some "slippage"). But only for signing a
> contract. Phones are not free, and they are not losing money on them.
Then let me ***** it out to you. On their 1st quarter financial report, as
filed with the FCC and FTC, Sprint reports equipment COSTS of $652M and
equipment REVENUES (not profits) of $328M. This is far from secret
information, as it is available from both the FTC and Sprint itself. Don't
believe it?
http://www.sprint.com/sprint/ir/fn/qe/1q05.pdf
Go to the last page- they are line items #3 & #5. In this age of uncovering
the great Corporate Monsters of the world and the perpetual notion that
cellular companies are evil, I sincerely doubt that the media, consumer
groups, disgruntled ex-employees or the various state AG's would allow this
to fly if it weren't indeed accurate. The link I provided gives proof of
what I say. I'll be more than happy to research anything you have that
proves otherwise.
> That would be bad business.
>
Actually, it would appear to be good business, because the $324M loss pales
in comparison to the $3.867B in revenue that they reported for the same time
period. They spent a little to make a lot. But they still lost money on
the phones.
- 05-18-2005, 11:33 AM #11Guest
Re: Phone Discounts vs Lower Monthly Rates
On Tue, 17 May 2005 17:50:37 -0600, "SS" <[email protected]>
wrote:
>Then let me ***** it out to you. On their 1st quarter financial report, as
>filed with the FCC and FTC, Sprint reports equipment COSTS of $652M and
>equipment REVENUES (not profits) of $328M. This is far from secret
>information, as it is available from both the FTC and Sprint itself. Don't
>believe it?
>
>http://www.sprint.com/sprint/ir/fn/qe/1q05.pdf
>
>Go to the last page- they are line items #3 & #5. In this age of uncovering
>the great Corporate Monsters of the world and the perpetual notion that
>cellular companies are evil, I sincerely doubt that the media, consumer
>groups, disgruntled ex-employees or the various state AG's would allow this
>to fly if it weren't indeed accurate. The link I provided gives proof of
>what I say. I'll be more than happy to research anything you have that
>proves otherwise.
Huh? Cellular phones in stores to sell are not equipment.
Equipment is computers for the office, desks, chairs, cellsites, stuff
like that.
Not items bought for resale, stock.
That item would be in the line with a title like "cost of goods sold".
But it's not broken out. It's on page 2. All lumped together. $1.8
Billion.
But that includes cost of services and products, so includes store
rent, office rent, cellsite rent, cost of running the network, telecom
costs, T1 lines, maintenance, etc.. You can't analyze profit or loss
on items sold in stores with that information.
Call their investor relations up and ask if you really want to know.
Find
- 05-18-2005, 01:03 PM #12TinmanGuest
Re: Phone Discounts vs Lower Monthly Rates
[email protected] wrote:
> On Tue, 17 May 2005 17:50:37 -0600, "SS" <[email protected]>
> wrote:
>
>> Then let me ***** it out to you. On their 1st quarter financial
>> report, as filed with the FCC and FTC, Sprint reports equipment
>> COSTS of $652M and equipment REVENUES (not profits) of $328M. This
>> is far from secret information, as it is available from both the FTC
>> and Sprint itself. Don't believe it?
>>
>> http://www.sprint.com/sprint/ir/fn/qe/1q05.pdf
>>
>> Go to the last page- they are line items #3 & #5. In this age of
>> uncovering the great Corporate Monsters of the world and the
>> perpetual notion that cellular companies are evil, I sincerely doubt
>> that the media, consumer groups, disgruntled ex-employees or the
>> various state AG's would allow this to fly if it weren't indeed
>> accurate. The link I provided gives proof of what I say. I'll be
>> more than happy to research anything you have that proves otherwise.
>
> Huh? Cellular phones in stores to sell are not equipment.
>
> Equipment is computers for the office, desks, chairs, cellsites, stuff
> like that.
>
> Not items bought for resale, stock.
>
> That item would be in the line with a title like "cost of goods sold".
> But it's not broken out. It's on page 2. All lumped together. $1.8
> Billion.
>
> But that includes cost of services and products, so includes store
> rent, office rent, cellsite rent, cost of running the network, telecom
> costs, T1 lines, maintenance, etc.. You can't analyze profit or loss
> on items sold in stores with that information.
>
> Call their investor relations up and ask if you really want to know.
>
While I do agree with you that I'd rather see handsets sold in a true
competitive market, I don't agree with the numbers you have provided
regarding the price paid by SPCS for handsets. There is little doubt
they are more expensive than you think. Here's a quote from Sprint's
2003 Annual Report (10-K):
====================
Revenues from sales of handsets and accessories, including new customers
and upgrades, were approximately 9.0% of net operating revenues in 2003,
10.0% in 2002 and 11.8% in 2001. These declines were mainly due to
higher rebates and lower gross additions. As part of the PCS Group's
marketing plans, handsets, net of rebates,
are usually sold at prices below cost.
====================
http://www4.sprint.com/03ar/download...3arForm10K.pdf
(On page 39.)
So there you have it; the smoking gun.
My concern is if those handsets are over-priced due to lack of open
competition (to end users). In the absence of such a market I can't
definitively say they are.
--
Mike
- 05-18-2005, 01:20 PM #13Guest
Re: Phone Discounts vs Lower Monthly Rates
On Wed, 18 May 2005 12:03:13 -0700, "Tinman"
<[email protected]> wrote:
>
>While I do agree with you that I'd rather see handsets sold in a true
>competitive market, I don't agree with the numbers you have provided
>regarding the price paid by SPCS for handsets. There is little doubt
>they are more expensive than you think. Here's a quote from Sprint's
>2003 Annual Report (10-K):
>
>====================
>Revenues from sales of handsets and accessories, including new customers
>and upgrades, were approximately 9.0% of net operating revenues in 2003,
>10.0% in 2002 and 11.8% in 2001. These declines were mainly due to
>higher rebates and lower gross additions. As part of the PCS Group's
>marketing plans, handsets, net of rebates,
>are usually sold at prices below cost.
>====================
>http://www4.sprint.com/03ar/download...3arForm10K.pdf
>(On page 39.)
>
>So there you have it; the smoking gun.
Yeah, well the question is how much less. $2? They didn't say. In
some cases I imagine that is the amount less. Completely offset by
the contract revenue which is why they do it.
For current customers I am pretty sure that is not the case. They
probably make some amount on current customers who need equipment. I
am sure it's not a whole lot, but it is not a loss, or not much loss.
The more expensive the phone the more they make on it since the rebate
is the same.
They would surely recognize sales and marketing expenses, support
expenses, cost of the activation process so as to make those be a net
loss, tax deductible for them, it would be ridiculous not to.
>My concern is if those handsets are over-priced due to lack of open
>competition (to end users). In the absence of such a market I can't
>definitively say they are.
Yeah, well I am sure they are much higher than they would be were
there competition.
- 05-18-2005, 01:23 PM #14Bob SmithGuest
Re: Phone Discounts vs Lower Monthly Rates
"Tinman" <[email protected]> wrote in message
news:[email protected]...
<snipped>
> ====================
> Revenues from sales of handsets and accessories, including new customers
> and upgrades, were approximately 9.0% of net operating revenues in 2003,
> 10.0% in 2002 and 11.8% in 2001. These declines were mainly due to
> higher rebates and lower gross additions. As part of the PCS Group's
> marketing plans, handsets, net of rebates,
> are usually sold at prices below cost.
> ====================
> http://www4.sprint.com/03ar/download...3arForm10K.pdf
> (On page 39.)
>
> So there you have it; the smoking gun.
>
> My concern is if those handsets are over-priced due to lack of open
> competition (to end users). In the absence of such a market I can't
> definitively say they are.
There is that Mike. Certain phone manufacturers only deal with one wireless
provider, like Sanyo ... when it comes to CDMA providers, so it's hard to
compare costs between providers. In saying that, I'm sure that Sanyo prices
out their phones to SPCS at the lowest mark up as possible, so that their
phones will sell @ SPCS stores, affiliates and retail stores.
Bob
- 05-18-2005, 01:46 PM #15SSGuest
Re: Phone Discounts vs Lower Monthly Rates
"[email protected]" <[email protected]> wrote in message
news:[email protected]...
> On Tue, 17 May 2005 17:50:37 -0600, "SS" <[email protected]>
> wrote:
>
> >Then let me ***** it out to you. On their 1st quarter financial report,
as
> >filed with the FCC and FTC, Sprint reports equipment COSTS of $652M and
> >equipment REVENUES (not profits) of $328M. This is far from secret
> >information, as it is available from both the FTC and Sprint itself.
Don't
> >believe it?
> >
> >http://www.sprint.com/sprint/ir/fn/qe/1q05.pdf
> >
> >Go to the last page- they are line items #3 & #5. In this age of
uncovering
> >the great Corporate Monsters of the world and the perpetual notion that
> >cellular companies are evil, I sincerely doubt that the media, consumer
> >groups, disgruntled ex-employees or the various state AG's would allow
this
> >to fly if it weren't indeed accurate. The link I provided gives proof of
> >what I say. I'll be more than happy to research anything you have that
> >proves otherwise.
>
> Huh? Cellular phones in stores to sell are not equipment.
Maybe not in your vernacular, but in the business world, they are most
certainly consumer equipment necessary to access and use the network.
>
> Equipment is computers for the office, desks, chairs, cellsites, stuff
> like that.
And none of those generate revenue, so again, the equipment mentioned is
indeed phones. The items that you mention are in the Capital Expenditure
line, where they belong. You missed the entire reason for the page you were
looking at. It is not a detailed financial statement, but a statistical
page of key metrics inportant to the industry that are not used in the
standard accounting. THe cost of computers is not one of those metrics.
>
> Not items bought for resale, stock.
Again, read above- those are Capital Expenditures.
>
> That item would be in the line with a title like "cost of goods sold".
> But it's not broken out. It's on page 2. All lumped together. $1.8
> Billion.
See above.
>
> But that includes cost of services and products, so includes store
> rent, office rent, cellsite rent, cost of running the network, telecom
> costs, T1 lines, maintenance, etc.. You can't analyze profit or loss
> on items sold in stores with that information.
>
> Call their investor relations up and ask if you really want to know.
Or instead of calling them, I can use the knowledge of reading these
financials that I have as an investor in the industry.
I'm still waiting for facts contrary to the numbers and have yet to see any.
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