Why did cell phone companies switch to paying for phones rather than giving phones at sign up or a low cost phone?
In: Technology
Previously- the cost of the phone was built into the plan price – so what seemed like a free phone wasn’t really. Then came the race to the bottom – a quick way to compete was to advertise lower prices and an easy way to do that was to decouple the cost of the phone from the plan – in reality you’re actually paying about the same if not paying more now than you were then but they get to say that you’re saving on the cost of the plan.
There is a plus side – if you decided to keep your phone after the payment period or you buy it outright, then you’ll save.
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