There is certainly nothing smart about paying seventy, eighty, or more, per month for a smart phone. If anyone is smart its the guys charging for it and getting it.
This was my realization when pricing out basic phone service with T-Mobile, ATT, etc. You have to really work hard to pay different. Just don't be afraid to break the contract, it's not a real penalty.
If you calculate the costs over a 2 year span, the differences are quite significant: http://jots.mypopescu.com/post/61007400356/iphone-5s-choosin...
_nb_: I haven't included any interest/depreciation rates though.
The trick is that most people don't replace their phones on a schedule. Some phones don't hold enough of a charge after 18 months and get replaced early; some people are still happy with their 4 year old phone. If you are on a pay-as-you-go plan and hold onto a phone for longer than 2 years, the savings start to really add up.
The other trick is that many people can get pay-as-you-go prices on contract, through their corporation, credit union, or university. When I was on AT&T in 2009, I used my university's alumni association to bring my cost down to $55 per month.
I just went to Verizon and chose a free SmartPhone (Droid 4) with a 500MB data plan. It was $80/mo 2 yr contract
I can buy that phone outright (brand new) for $300.
If I go to PagePlus (Verizon MVNO) and sign up for their $1200 Minute, $3000 Text/MMS 500MB $30/mo plan here is what I paid after two years.
Verizon - $80 * 24 = $1,920
PagePlus - $30 * 24 + $300 (phone) + $50 roaming (average usage cost for 2 yrs) = $1,020
And what did I get for my $900 difference? (That is $37.50/mo BTW) A big "Verizon" label on my phone, and a two year contract.
You could get two plans and phones from PagePlus and still pay less.
I realize that there are other factors like level of customer service, and no roaming charges that VZW and ATT die-hards will tell you about. Well, in my experience, the service is no better and most people almost never use roaming service while using a Verizon MVNO. I would say that i have only spent around $20 in the last two years from roaming.
Other factiods: Have Verizon or ATT and want to change your plan options (Minutes, Data amount ETC)? Sure - that will require a new two year contract. Don't want a new phone. Well you will still be paying the same regardless. Break the contract and you will still pay the same penalty. This seems to refute your claim that you are just paying back a subsidy.
Want a new phone with your new contract? OK, choose a "free" one from a list whose retail prices have a $150-$200 difference in price. Are you going to pay less per month if you opt for the cheaper (3g) free one? If your statement was true you should.
