Smartphone Thoughts: Phone Subsidies Hurting Consumers?

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Thursday, June 7, 2007

Phone Subsidies Hurting Consumers?

Posted by Rocco Augusto in "THOUGHT" @ 02:24 PM

http://www.businessweek.com/globalbiz/content/may2007/gb20070529_601522.htm?campaign_id=rss_daily

"The fight over customers is so fierce that, for new subscribers, operators will even offer their year-old models for as little as a penny. The tab for subsidies alone can set the operators back some $16 billion a year...Sounds like a bonus for the common man, right? Not necessarily. The operators recoup their spending by charging consumers steep prices for air time."

Talk about hitting the nail on the head. During my time working for Cingular, and ever other major carrier in the United States, I was amazed to learn just how scandalous all of the carriers were with their hidden fees, incredible jacked up air-time charges, as well as cancellation penalties. My all time favorite story involves one of my customers that accumulated a $6,000USD phone bill all because her son went over their allocated minutes due to not having unlimited nights and weekends and used a couple thousand text messages. Sounds pretty crazy, huh? You know what is even crazier? If that same customer would have spent an extra $40USD to cover both unlimited SMS as well as bumping her plan up to the next available minutes package, which included unlimited nights and weekends, she would have been fine. Go figure! :(

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