No thats not quite how it works. The best way to save money and which is what youre kind of referring to is buying a phone for the non contract price. Which for lets say a Samsung SG3 would be $650. You can then in turn use on a prepaid plan. For example Straight Talk which allows any GSM phone. Also other benefits are no ETF if you want to change providers, you can upgrade whenever you want. Unfortunately both ways dont really save you that much money. When you buy a phone with a contract extension you are essentially paying the difference in what it would cost you to buy the phone outright.
Aside from the economics of buying a phone outright, US cell carriers use different technologies, unlike most of the world. You can't just buy an iPhone and then decide if you are going to use AT&T or Verizon after the fact, because the signaling system is completely different. Even if two carriers use the same signaling technology, a given phone may not operate on all of the radio frequencies necessary to work on both. You can buy an unlocked phone to avoid long term contracts and early termination fees, but most of them are designed to work with only one carrier.
fluffy (rep: 2.2k) posted Jul 16, 2012
I can buy a Galaxy III S on August 1rst, on sale, for about $175 as an upgrade (Wirefly) and continue to pay about $70 a month for Sprint's unlimited voice/text/data plan for a total two year cost of about $1,855. Or, I could buy the phone for about $650 and pay as low as $45 a month for unlimited everything (as Acidbaby explained) for a two year cost of about $1,730. The difference is about $125 in favor of buying the phone outright. For that small amount I'd just as soon not have to come up with $650 all at once for the phone. But that's just me. Someone else might find the $5.21 savings per month as attractive. I should note that I only used the two year contract time frame for this example. At three years the difference between the two methods would rise to $11.81 per month in favor of outright buying the phone.
erick99 (rep: 120k) posted Jul 16, 2012
The plus is you can upgrade phones more frequently and get a higher return on your old phone.
What fluffy is referring to isn't as complicated as it sounds when it comes to types of carriers. Your big 3 worldwide are GSM, CDMA and PHS. If you have a GSM phone such as ATT it will work most anywhere in the world there is a GSM carrier. My iPhone is from the telecom company Softbank in Japan the reason being is the iPhone is pretty weak in Japan and for awhile (not sure if they still do) iPhones were free to
Military and students of japan. Which I acquired mine through my daughter who lived in Atsugi.
Acid baby- Most of the time that may be, but BBATTAG is correct.
A lot of the times you can get some really great deals on the company's phones. Also, take in mind, that if you buy one certain phone, usually you have to get the correct service which adapts to that particular phone, for instance, if you buy a METRO PCS phone, it may not be compatible to the VERIZON network. Or a TMOBILE phone may not be compatible to something else.
See where I'm going? Most of the time, it is best to the phone with the 2 year contract, of course you can always modify the deal once you get it. It may be easier that way.
MdavidK30 (rep: 3.6k) posted Jul 17, 2012
It doesnt matter if you get a phone for free from ATT, Verizon or whoever. It still costs more over the length of a 2 year contract. Its a gimmick dude, all contract cell phones are subsidized into the price of the plan.
Lets do the math. Lets say the hot new phone. Galaxy S3, with a contract it is $200 (yes you can get it cheaper for less, it doesnt matter) We'll go with ATT, the minimum plan for that phone is $40 add on the data package. $30 for 3GB. There is $70, + tax and all the surcharge fees. Youll be looking at about $85 a month. 24 months x85=$2040+$200 for the phone $2240 - Lets say somehow you managed to pay less for the phone. Maybe even free. Youre still looking at $2040 for24 months.
Now buy the phone at full price. $550. Subscribe to the Straight Talk unlimited plan which is $45 a month. 24 months x $45=$1080+$550 for the phone= $1630. You do not get charged surcharge fees or regulatory fees with ST or other prepaid providers. Just state income tax. So monthly your looking at maybe $3 for taxes so we'll just add another $40 which brings us to $1670. Now if you prepay your plan for the year you get a discount with ST. 1 year of unlimited service is $495+ the phone = $1045+ taxes brings you to roughly lets do a nice big round up to $1100.
Now tell me youre getting a good deal on a phone when you sign a contract. Here is 5 minutes worth of info working with the hottest phone in the USA right now and the difference is quite a bit. Even if you were able to get the SG3 free somehow youre paying almost double what you could be paying buying it outright and going with another provider. At the worst you still paying $500 more during the life of your contract compared to someone who pays full price and shops around. And this is just one example.
Acidbaby (rep: 6.9k) posted Jul 17, 2012
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