Contracted vs. pre-paid wireless

Moderated by Andrew Nusca | February 11, 2013 -- 07:00 GMT (23:00 PST)

Summary: Do unlocked devices spell doom for crappy carrier lock-in?

Denise Amrich

Denise Amrich

Contracted

or

Pre-paid

Christopher Dawson

Christopher Dawson

Best Argument: Pre-paid

5%
95%

Audience Favored: Pre-paid (95%)

The Rebuttal

  • Great Debate Moderator

    Mic check...are my debaters standing by?

    First question coming promptly at 11am ET / 8am PT

    Readers: You will need to refresh this page *once* anytime after 11am ET / 8am PT to jump start this live debate...once you do, the page will auto-refresh with each of our questions and answers. 

    Posted by Andrew Nusca

    Ready here!


    Denise Amrich

    I am for Contracted

    Ready here...

    ...and with the popular vote at my back.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    I'd like to start by looking at the merits of each option...

    Contract-based mobile devices are extremely popular in the U.S., about 75 percent of the total market. Why?

    Posted by Andrew Nusca

    Shiny subsidized devices

    Contract-based mobile has historically been the most popular because individuals have been able to get nice, new, exciting devices at subsidized price points that are far below what they’d pay if they were buying their devices at retail prices. The penalty fee for leaving the service before the contract ends generally makes up for that cost difference. However, switching in a world where carriers will pay your old contract fees in order to help you start fresh with their service isn’t all that hard.

    As for enterprise users, corporations are used to doing business by contract and naturally gravitate towards major carriers, in part so they can develop support relationships that will help them meet their objectives.
    With the advent of smartphones, prepaid phones became further stigmatized as uncool, especially since newer and better ones were released all the time that were unavailable on prepaid programs.

    But now a few better devices are available without contract commitments, it’ll be interesting to see if it gets closer to 50% on each side. Of course, people will still find it prohibitive to throw down half a grand every time they want the newest toy. So people may still buy and stick to a device for a reasonable period of time.

    Denise Amrich

    I am for Contracted

    Cost

    In the not-so-distant past, pre-paid wireless was largely the domain of cheap feature phones. They were fine for your 12-year old's first phone (or your grandfather's first, for that matter), but serious phone buyers were fairly limited in their choices. iPhones were not generally available unlocked for use with pre-paid providers and top Android phones aren't sitting on convenience store shelves next to the pre-paid minutes cards.

    The biggest reason, though, is cost. Very few people in the US were willing to fork over $600 for an unlocked phone that could be activated on a pre-paid carrier. Going though one of the big 4 carriers got you big subsidies on a new phone every two years, making even flagship models relatively affordable. Not only did the Nexus 4 dramatically change the landscape in this respect, but consumers are beginning to acknowledge the critical role smartphones play in their lives, and are increasingly willing to pay as much for their phones as they might a computer.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    On the other hand...

    ...Outside the U.S. -- from western Europe to China -- pre-paid options are more popular. Why?

    Posted by Andrew Nusca

    Money, credit, and time

    In some countries outside the US, individuals don’t actually have access to credit. Some places are just starting to offer microloans. Some countries don’t have credit bureaus the way we do, and they don’t really have the financial infrastructure to create an environment of trust when it comes to lending enough money for very expensive portable devices.

    Another reason is that prepaid phones have historically been the most affordable phones available. For people making a very low wage, having even an inexpensive phone can be a huge cost item. Also, emerging nations haven’t had the level of corporate infrastructure for major enterprise device provisioning.


    The EU is an interesting case because although there is a common currency, there are so many carriers there. I remember reading that the iPhone was more than fashionably late to the party in Europe because of the difficulty Apple had in negotiating contracts with such a number of carriers, and complying with a wide variety of national and even regional regulations.

    Denise Amrich

    I am for Contracted

    Simply history

    It would be easy to point to rampant consumerism in the US. We want new gadgets, we want them now, and we want them at Walmart prices. This mentality isn't exactly unique to us, but it certainly rears its head. Major US carriers built out often incompatible wireless infrastructure at great expense, leaving us with a bunch of CDMA towers, a bunch of GSM-compatible towers, and a tough time just swapping out SIM cards to switch providers.

    However, the more significant reason is simply history.The rest of the world largely conformed to the GSM standard and rapid infrastructure growth, different incentive systems, and different regulations made more opportunities for consumer choice and competition. Consumers in other parts of the world generally didn't grow accustomed to subsidized phones but did become used to buying a phone and being able to move it between carriers. Keep in mind that even the ability to port your number to a new provider literally took an act of Congress, not so many years ago.

     

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    Unlocked: Why now?

    Now that we've looked at the market constraints, let's discuss the variable here: unlocked devices. Why are we now seeing an uptick in this kind of device?

    Posted by Andrew Nusca

    Market saturation

    Market saturation is responsible for the uptick in unlocked devices. There are a huge number of devices out there that still work even though their contract time is up. These used devices can be unlocked and resold. Companies like Gazelle have a great working business model in buying and reselling these phones.

    Also, manufacturers like HTC, Apple, and Samsung have saturated their primary markets and are looking to expand their growth. They have to grow from quarter to quarter, and this makes it necessary to tap into new markets, bringing new users into the fold, users that may fit better with prepaid plans.

     

    Denise Amrich

    I am for Contracted

    A few reasons:

    Prices are coming down, particularly in response to pressure from Google, making the carrier subsidies a bit less critical.

    The major carriers suck more every day. Either their coverage isn't what you need or new data caps are making the carriers far more expensive on a monthly basis.

    The recession: Even gadget-fiends are giving a nod to more frugal times when saving between $5 and $20 per month is very much an incentive to drop their carrier and switch to pre-paid.

    The "post-PC era" - Today, our phones are our primary computing devices. When that was true of desktop computers, would we (meaning power users) have tolerated a limited or compromised computing experience for the sake of a hardware discount? Especially if we couldn't install any software we chose or uninstall crapware and bloatware? The answer is no.

    Android fragmentation and update delays: Google is releasing significant upgrades to Android on a very regular basis and each iteration is a leap forward in capability, speed, and stability. Waiting for carriers and OEMs to push out updates is frustratingly slow; unlocked phones solve this problem.

     

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    Under pressure?

    What pressures are unlocked devices putting on the contract-based business model?

    Posted by Andrew Nusca

    More freedoms create competition

    The economy still isn’t super. People want to spend less, and control their expenditures better. Any pressure placed on the contract business model by unlocked devices is great for everyone, prepaid and contract based customers alike. Every time a new freedom is available, others will be pressured to offer competitive options or perish. Sooner or later, we may see the best parts of what contracts have to offer, without the worst parts. 

    Companies like Apple are being pushed to offer prepaid phones. They may or may not succumb to that pressure. The manufacturers get quite a nice annuity from the carriers and may not want to let go of those profits.

     

    Denise Amrich

    I am for Contracted

    Nearing a tipping point

    Unlocked devices are still a very small fraction of overall devices activated in the US, so the pressure, at the moment at least, is relatively small. However, the runaway success of the Nexus suggests that we're nearing a tipping point where unlocked phones are both compelling and inexpensive and consumers are willing to leave the security of a contract and guaranteed upgrades for flexibility, savings, and the best phone experience they can buy.

    Where the major carriers are starting to feel the pressure is in the plans they offer, especially in terms of monthly data. Shared data plans, for example, are being pitched as a way for families with multiple devices to save money. However, only pre-paid carriers are offering unlimited data anymore (even if that is often throttled after a certain point). For heavy data users, no amount of family sharing will save as much money as truly unlimited plans.

     

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    New business model?

    Does the contract-based business model have to change to fully embrace unlocked devices? (How?) Or is it merely another option?

    Posted by Andrew Nusca

    Another option

    Fully embracing unlocked devices is definitely another option, but I don’t think business models have to be an either/or proposition. Corporate customers are often going to prefer plans because they actually like vendor relationships (and are in a position to negotiate fair ones).

    It’s important to differentiate here between unlocked devices and jailbroken devices. Chipset compatibility is an issue from carrier to carrier, although we’re beginning to see a trend in world phones that will run across communications technologies. Jailbroken devices are dangerous and often can be easily compromised. No vendor wants to embrace that.

    Denise Amrich

    I am for Contracted

    Unlocked devices should be a very easy option for contract-based providers.

    Give customers a SIM in their network-compatible device, activate the SIM, put it on a contract, and you're done. Of course, if this were the case, consumers would have no incentive to jump into a contract where early termination fees would remove much of the flexibility offered by an unlocked phone.

    It's interesting that in the United States, the land of capitalism, telecommunications have long been fairly monopolistic. Even though the carriers compete for our initial business, once we've selected a carrier, our current dominant business models make it very hard to leave. If unlocked devices become the norm, the contract-based business model becomes a much harder sell, which is why carriers are doing everything they can to avoid embracing unlocked devices.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    Impact on IT?

    Since this is ZDNet, let's talk about a use case near and dear to our hearts: the workplace. How does the unlocked device impact the IT organization -- technically, contractually?

    Posted by Andrew Nusca

    Chaos

    The unlocked device creates chaos in the already overburdened IT organization. If corporations are supporting BYOD devices (either because of cost considerations or employee demand), and they expand that to allow any unlocked device, they will have to support a completely indeterminate set of systems with a wide range of security issues, functions, and interfaces. Insert headache here. Users will be disgruntled because they will be frequently told, after hours of fruitless attempts to make things work, that “You can’t get there from here.”

    There will be users who insist on running their old Treo 600 on the corporate network while someone else will find some bleeding edge, weird unsupported Linux variation that they want to connect to the Exchange server. Any savings a company might have hoped for will be used up in IT hours.

    Denise Amrich

    I am for Contracted

    Extraordinary opportunities

    Under current models, depending upon the phone vendor, procurement becomes an issue, especially for any government-funded organization where strict procurement rules and approved vendor lists are the norm. As a CTO, how would I have purchased 1000 Nexus 4's from Google to deploy to my organization? On the other hand, it's downright simple to go to Verizon and order 1000 iPhones on a large corporate contract.

    Then comes the issue of managing their monthly costs. Current pre-paid models simply don't scale well to the enterprise level and one could only imagine the looks she might receive when a well-dressed CTO walks into the local 7-11 and asks for 1000 airtime cards. Obviously, this can be done online as well, but pre-paid providers (including their online management tools) are geared towards individual or family consumers.

    That said, the business opportunities for a systems integrator who can negotiate an arrangement with OEMs offering unlocked phones and a pre-paid provider are quite extraordinary. This also paves the way for increased BYOD, where employees simply receive some allowance towards the purchase of an approved unlocked phone and their monthly airtime, the management of which is then their individual responsibility.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    How much does reputation matter in this equation?

    Many Americans continue to perceive unlocked devices as cheap -- only for those who can't afford contracts. Will the availability of top-flight devices shift that perception?

    Posted by Andrew Nusca

    Phones are fashion

    Perceptions will change over time. Phones are a fashion accessory. True, there is always a sense of exclusivity associated with certain brands. But prepaid vs. contract is not what makes the phone exciting. That’s all about the form and function of the phone.

    Whenever the really coolest phones are available without contracts, the social utility may shift to getting the best deal for the most awesome phone. But I’ll bet that contract players are going to do their best to make sure the cachet doesn’t leave the brand.

    Denise Amrich

    I am for Contracted

    Yes, and it already is

    Unlocked iPhones are highly sought-after and people pay a significant premium for them. Google can't keep the Nexus 4 (the best phone I've ever used, by the way) in stock. And even the pre-paid providers themselves (notably Virgin Mobile and Boost Mobile) are offering relatively high-end Android devices that don't look like the Tracfone your little sister got for her 12th birthday.

    This stigma still exists to some extent, but increasingly, especially among the technorati, pre-paid carriers are being seen as sources of no-hassle unlimited data on their unlocked phones.

     

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    T-Mobile was one of the first American players to push hard for pre-paid devices.

     It didn't work. Why?

    Posted by Andrew Nusca

    Disturbingly poor reception

    T-Mobile freedom was awesome. T-Mobile service was not. I actually had one until two years ago, before I got my iPhone. T-Mobile as a company has always been, to some degree, perceived as more reasonable with its customers.

    But their network has just never been as strong as the bigger players. We all had such high hopes for service improvement when they were looking like they were going to fully merge with AT&T. That seems to have melted down.

    Denise Amrich

    I am for Contracted

    It didn't work at first for several reasons:

    T-Mobile lacks the necessary coverage to reach what was then a fairly downmarket demographic (kids, grandparents, rural poor, and even urban customers who lacked the credit for contracted phones).

    T-Mobile has a great brand among professionals who live in the major cities they serve well; as little as a year ago, this demographic wouldn't have even considered pre-paid and often had corporate accounts anyway.

    Android phones were neither cheap enough nor plentiful enough in configurations compatible with pre-paid models for T-Mobile to make a case with any demographic at the time.

    I would argue that this has actually changed dramatically in the last year. T-Mobile is now consistently recognized for very aggressive and innovative pricing (e.g., $30/month for unlimited data and only 100 minutes of talk time for the frequent customer who rarely talks on their phone but uses data heavily) on their pre-paid plans. Their bring-your-own-phone plans are easy and inexpensive and they have made significant network upgrades. They're also the only US carrier to offer the Nexus 4 directly and have a wide selection of solid phones on their no-contract and pre-paid plans. Again, it's all about timing; the timing wasn't right when they began their push. It's right now.

     

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    2017?

    Whether you believe unlocked devices will change the game or not, we won't see change for quite awhile -- because most Americans are locked into two-year contracts. In terms of pre-paid or contract-based, how do you think the mobile market will look in, say, 2017?

    Posted by Andrew Nusca

    Lots more users

    By 2017 we should all have free phones in our flying cars.

    In all seriousness, most likely Android will be dominant and may have merged with Chrome. The Chrome OS and Android are both engineered by Google and are likely to become more tied in with each other over time, creating a dominance and convenience factor that will be hard to ignore. This is especially true since there are relatively few licensing fees compared to Microsoft and no lock-in compared to Apple.

    As mobile technology sweeps the globe, we’ll see more and more users. Inexpensive Android phones and other mobile devices on prepaid licenses are likely to dominate in emerging nations with large populations. Some of these countries never had great land line infrastructure to begin with, so this will have a democratizing effect.

    The Contract will still have a place. It will simply have to offer more, perhaps a shift towards helpful support and less towards that unsatisfying feeling of being locked in. There will probably always be more contracts in enterprise, and in the western world.

     

    Denise Amrich

    I am for Contracted

    Unlocked, converged devices will be the norm...

    ...with consumers and businesses simply buying access to widespread 4G networks. Sprint will be gone, subsumed by one of the bigger pre-paid providers who already resell bandwidth on Sprint's network. Verizon and AT&T will be premium and enterprise providers, having shifted their business models to accommodate unlocked phones around 2015 when the exodus to pre-paid providers began.

    T-Mobile? That's a little less certain; their rebranding is going well and they are leading pre-paid among the big 4. We'll have to wait and see there.

    Most importantly, though, when consumers and businesses want to buy phones and tablets (the latter, by the way, will replace phones for many individuals who simply use VoIP and a headset to make calls through their tablet which is their primary computing and communication device) will go to the same places where they would purchase computers, networking equipment, televisions, or any other electronics. Consumers will buy unlocked devices from big box stores and businesses will buy them from VARs or direct from OEMs, and manage them in the cloud, allocated bandwidth as appropriate to users. Gone will be the days of buying phones at the Verizon Store.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    OK, final question:

    Are your personal mobile devices pre-paid, or on contracts? Why?

    Posted by Andrew Nusca

    Contract iPhone

    I have an iPhone 4, which I got when I was moving to our new house. I had to let go of my T-Mobile prepaid flip phone because I needed all the capabilities of a smartphone in order to be able to do my job remotely while managing multiple contractors on the go. I needed to have actual reception, which I didn’t with the T-Mobile phone. At the time, T-Mobile didn’t have anything resembling a decent smartphone.

    My contract is up in April, and I haven’t decided what to do. I think the monthly bill is a bit high. But I do get a lot of use out of the iPhone, and I really like it. I may keep this one for a while after the contract is up and see what exciting new options arrive on the mobile scene.

    Whether I go for another contract, or a prepaid phone, things are only going to get better and more interesting with the introduction of more competition.

     

    Denise Amrich

    I am for Contracted

    My personal phone is a Nexus 4,...

    ...purchased direct from Google and running on a pre-paid provider. My various tablets and notebooks are WiFi-only and I just tether them to my phone. My family is still stuck in a family share plan because 1) There's lots of us and my early termination fee to leave Verizon was high enough; ETs for the whole family would give my wife a coronary and 2) My wife pays the bills and managing pre-paid airtime for everyone on devices she (Luddite that she is) things are frivolous anyway just wasn't going to fly.

    I wanted fully stock Android, the latest updates, and reasonably priced unlimited data; none of those were going to happen if I stuck with Verizon.

    Christopher Dawson

    I am for Pre-paid

  • Great Debate Moderator

    Thank you, Denise and Chris, for a spirited debate

    And thank you, readers, for your comments and votes. Please check back here tomorrow for our debaters' closing arguments, and again Thursday for my final verdict.

    Neverbe late for a live debate -- sign up for our Great Debate newsletter.

    Posted by Andrew Nusca

    Always a pleasure!


    Denise Amrich

    I am for Contracted

    Thanks, all

    Going to work now on my closing argument...

    Christopher Dawson

    I am for Pre-paid

Talkback

81 comments
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  • Who in their right minds thinks contracts are a good idea?

    Who in their right minds thinks contracts are a good idea?

    Seriously, who?

    It's practically a form of slavery.

    For two years you rent a device. If you quit ahead of time, you pay through the nose. If you go over your limit, you pay through the nose. If you "roam" outside their network, you pay through the nose. If you do anything they don't like, you pay through the nose. They have a million ways of taking money out of your pockets.

    And don't get me started with news outlets who preach the idea that the up-front cost is "the price of the phone" when they know full well IT'S A LIE, because you're paying for it via the plan.

    And don't get me started with limiting total bandwidth per month. It *should* be like what you get when you buy Cable or DSL: Pay for speed tiers, and the company reserves the right to shape bandwidth to ensure quality internet for all.

    Instead, we get "caps" which are a really crappy way of dealing with the limited bandwidth issue. If you go over, you pay through the nose. And forget doing anything like watching video or installing apps. Wait until you're on WiFi for that. And make sure your phone doesn't silently switch to your data plan while watching that video. I've been hit by that more than once.

    Contracts are IMO the result of cell phone companies basically having an oligopoly. They can do it because they know you basically don't have a choice - because all of the others are doing the same thing.

    Frankly, I'd like them to act more like my local Cable or DSL: Give me a single monthly price, allow me to use whatever bandwidth is available in my area, and throttle/shape my bandwidth if I'm in a city or someplace with a heavily used network.

    That's IMO the ideal. But apparently the main street friendly way is not the way to make the wall street people happy. So main street loses, again. It's all about the profit, and nothing about the customer.

    And boy they do love to exert their oligopoly control: Recently, I moved back to the USA from a foreign country. Thanks to a military clause, I was able to end the contract with the foreign cell phone service prematurely without penalty.

    Getting the device unlocked? Not part of the clause. So guess what? I have an iPhone that can't be used as a phone until August. It's a fancy iPod touch, for all intents and purposes.

    We need to give these companies a wakeup call. We really do. Maybe even throw some antitrust law around a bit more.

    Yeah - from now on, I'm likely to go prepaid. Especially now that the iPhone is available unlocked. My next phone is not gonna be contract.

    I *hope* they spell doom for contracts. That would be great.

    But, alas - I know better, sigh. They're not gonna give up on contracts that easily. They want to keep that $$ rolling in, even if it means screwing the customer. Because it keeps wall street happy. And their money does come from wall street.
    CobraA1
    Reply 12 Votes I'm for Pre-paid
    • I'm not following Denise's argument . . .

      "However, for those of us who like the enhanced productivity that comes with making a decision to commit to a carefully researched, decent quality system that is appropriate for our needs, it's nice to not have to learn how to use a new phone every five minutes when our no-name carrier does something cheesey that makes us go off in a huff."

      I did my research. And my carrier is not "no-name," it's pretty much everywhere. It's only "no-name" because tech publications do a lousy job of covering pre-paid carriers.

      "You're going to pay one way or the other. "

      True, but contracts are very deceptive. And they currently have what amounts to an oligopoly. Which means that everybody has basically the same lousy business practices, which ensures you get lousy service no matter what provider you choose.

      "the house always wins."

      *IF* the house is an oligopoly or monopoly. If there's competition on price, the consumer wins.

      And you know what? If you can switch carriers within a month or so, that means that you can easily vote with your wallet.

      It's not so easy to vote with your wallet when the end of your contract is over a year away.

      Easier to switch == more voting with your wallet == more competition == win for consumers.

      "It's about devices like tablets with 4G in them. These have to connect to the corporate networks in the companies where most of us have to work in order to pay for all the electronic gadgets we love so much."

      Uh, no, I don't plan on connecting my personal device to a corporate network. Work and personal life are staying separate for me. I don't want the headaches that come with crisscrossing my work and personal life. I certainly don't want to give any business the ability to remote wipe my personal phone.

      If they want me to bring my own device, I'm liable to buy the cheapest piece of junk that's still considered acceptable. Because I ain't making my personal device my work device.

      "So, the security of reliable carrier lock-in with reputable vendors is here to stay."

      It's no more "secure" nor "reliable." At least I haven't seen any evidence of that. In fact, I'd say just the opposite: They have a million ways to charge me extra, and will drop my service at the first time of trouble.

      They don't word the contract in a way that prevents *THEM* from doing whatever the he** they want. They word it in a way that prevents *ME* from doing whatever I want.
      CobraA1
      Reply 4 Votes I'm Undecided
      • And now she pulls out a tech support argument . . .

        "But the beloved folks in your lives who are more like the 'Luddites' Chris mentioned in his answer to the last question are going to be putting more of a tech support load on you when they stop going to the AT&T Store or the Apple Store to see the Genius because they like the idea of paying less for their phone service."

        I don't think Apple ever sad they'd stop repairing phones that were bought unlocked to use on StraightTalk or whatever, and I'm sure the pre-paid folks will support their own services.

        In any case, it's not like a phone needs a whole lot of support anyways. It's not like a PC where you may have to deal with things like the registry or file system or some sort of other backend stuff, because that stuff is generally unavailable to even power users. They're very straightforward devices, and this idea that you'll be providing continuous support, even if it's because you switched from contract to pre-paid, is rather bogus.

        "Freedom isn't free."

        No, it isn't, but without a two year lock-in, I think that there's gonna be more competition on price, which will keep prices lower. The companies are probably getting larger margins on the two year contracts because they know you can't easily switch to a competitor.

        "Although there is plenty of information about how to buy dumb apps from the Google Play store . . ."

        I dunno about the Play Store (iPhone here), but buying apps is easy at the iTunes store. You just tap a button and enter your password. 99% of people don't need any instructions other than to show them that you buy stuff from the store. And it doesn't change regardless of whether your device is under contract or not.

        You act as if somehow this were some complex procedure that nobody could figure out. Are you serious? It's not.

        "So our friends and families will have a $300 brick and a huge homework assignment of how to find a carrier, read the fine print on whatever non-contract paperwork they're required to sign, be freaked out by the decision making process, and lean on us."

        Well, now you have things a bit backwards. You generally find the carrier before you buy a new phone. Unless you have an existing phone or are really into a single brand of phone.

        And you know what? MY CONTRACT LEFT ME WITH A BRICK.

        Yup. That's right. I got out of the contract, but they won't unlock the stupid phone until August. All I have right now is a fancy iPod Touch. Guess who has some really, really horrible fine print? The contract.

        Granted, it was a foreign carrier I was under, so maybe in the USA things work a bit differently, but it does show the kind of shenanigans monopolies are willing to pull on their customers.

        "It's a good thing you all love no-contract devices so much, because you'll be configuring (and re-configuring) a whole lot of them."

        LOL. Not really. You're just trying to find ways to discredit them now. Pulling at straws, so to speak.
        CobraA1
        Reply Vote I'm Undecided
    • You have a choice

      You don't need a cellular phone. Very few do. Vote with your wallets people.
      People
      Reply 3 Votes I'm Undecided
  • Im for Pre-paid also

    I recently upgraded my Pre-paid cell(which I still have and use each month...@$16.25 per month for two phones on a family plan you can't beat it) to the Straight Talk Samsung Galaxy Proclaim. I have had it nearly two weeks and still haven't been able to use it because it is my first touch type device and it is hard to learn as Straight Talk now has the much more expensive Iphone and is not supporting the one I bought which was their previous favorite seller..getting to tech support can be nearly impossible and finding apps for this Proclaim is not easy either. I will conquer this but it will take time and patience and mean time I do not have a contract!!!!
    STARTWYNKLES-58
    Reply 3 Votes I'm for Pre-paid
  • Going prepaid after 23 years of cell service with a contract!

    Purchased my first semi-brick phone with service in 1990. Been on contract ever since...
    However, when I did some basic calculations I discovered how irrational post paid service is:

    They make you think that you are buying a phone for $200, but don't tell you that the balance of additional $400 you will pay over the next 24 months.

    You are stuck with a 2 year contract, and are drooling with a sight of a new terrific phone introduced a week after you signed up.

    They do you a favor by letting you sign up for a new phone and CONTRACT after 18 months for ADDITIONAL 2 years.

    And that just for starters.

    My most recent contract with AT&T (ending in 2 weeks) cost my wife and me about $150 a month with 550 minutes to share, unlimited text and 2GB data per phone. Yes, we get free evening calls, free weekend calls and free calls to any AT&T wireless number.
    But when I analyzed our calls I discovered that on average, each of us, including weekends evenings etc. is using a total of 165 minutes a month!

    We were lucky to buy our HTC Inspire 4G phones for $50 each two years ago. So how much our contracted cost is? $100 + tax for two phones, $3,600 for service and almost forgot: $72 for “activation” of the service. Grand total of $3,780.00!! Wow...

    The solution? We purchased 2 brand new Galaxy Notes II GT-N7100 (factory unlocked, SIM free, international version) for a total of $1200 for both from newegg.com. We are signing up with T-Mobile’s $30 a month (per phone) service which includes unlimited text,100 minutes and 5GB high speed data per phone. If we go over 100 minutes, we pay 10 cents per minute.
    Total estimated cost for the next 24 months? $2950. But wait, we are getting a much better phone, that on a contract would cost $300 per unit! That would raise the AT&T 2 year contract to $4320... Instead we will be paying $1370 less!
    And there is no contract, which means we can switch to any GSM prepaid service at any time.
    cnet10
    Reply 7 Votes I'm for Pre-paid
    • But you are on T-Mobile.

      I once went 8 days without a cell. 8 days of travel in the lower-48 states and no cell.

      Even on contract, T-Mobile is much cheaper than AT&T for a reason. As bad as AT&T coverage is, T-Mobile is much much worse.
      Bruizer
      Reply 2 Votes I'm Undecided
      • OK, so what?

        First, I do not travel within the US much. But if I go to an area with poor T-Mobile service for any length of time, I can but an AT&T compatible SIM card from a long list of MVNOs supporting AT&T, pop it in for the length of the trip! This is why prepaid with an unlocked phone is a great solution.
        That also works for AT&T users traveling in bad AT&T service where T-Mobile may be better.
        cnet10
        Reply 1 Vote I'm Undecided
        • And that greatly adds to your cost equation.

          For people that never travel, that is OK. For people that actually leave their home areas, that is very unpractical. So as long as Verizon and AT&T costs for pre-paid and on-contract are basically the same, there is no reason to go pre-paid.
          Bruizer
          Reply 1 Vote I'm Undecided
          • Greatly add to costs?

            Actually, it doesn't. If service is not working great with the service you have, you find another one (as I did). Whether it would cost any additional money at all depends on if you are willing to wait until the end of your service period (a matter of days, since you're not under contract) or leave immediately. Any additional cost would possibly be the difference between the new plan and the one you're leaving. Even then, you're talking a few dollars.
            jamerican413
            Reply Vote I'm Undecided