Decaflon

Originally they did it to make up the cost they wanted to make on the phones, especially the subsidized ones. It's easy to terminate the service. The pricing is dependent on making X amount for each phone. The early termination fee kind of guaranteed that. A lot of people switch and collecting the fee can cost more than just losing the money in the first place.

That would be a good study: how much money does a company spend just to get back a $100 early termination fee?

Contracts came about because of customer churn. It's an entirely inside out concept. Yes, it does cost to set up a user as well as terminate them, but it's negligible and can be made next to nothing by efficient operations.

Then they started being part of phone subsidies, and that still is the case in a lot of places.

But more, it's just a rather dishonest ploy to get people stuck and not have to worry about actually having the best prices or service.

But more, it's just a rather dishonest ploy to get people stuck and not have to worry about actually having the best prices or service.

Couldn't agree with you more.

I don't see why fixed term contracts are the biggest evil here. They manage to give you your handset for a lot less than its retail markup in exchange for you paying them the moolah over a long contract.

Apple (and others) selling exclusive contracts so you can only receive a certain handset on a certain provider and sometimes only on certain tariffs is what causes stagnation - especially when the handset is as fashionable as the iPhone.

But it's ultimately your fault. If the contract isn't good, don't end up on it. Switch provider (if you can), let them know you're considering switching away. I've had luck beating O2 into giving me a better-than-standard renewal by saying I need my number unlock code.

You could argue that (as I pointed out last time) the deals are improving for the 3g model in some places without inter-operator competition, but I think, in the UK, O2 and Apple have been feeling serious heat from other smart phones with a lower-price, on better tariffs and so they have to compete.

But that's here. The US mobile market is poor and has always been poor. People are locked to one carrier because there is a difference in actual service (not sure if this is still true).

But that's here. The US mobile market is poor and has always been poor. People are locked to one carrier because there is a difference in actual service (not sure if this is still true).

Depends on where you live. US is kind of a big country.

If you're in an urban area... most networks have good coverage everywhere. When you get into the country, you just never know.

It wasn't always like that. The companies started building out the infrastructure from different cities so certain providers would own regions. It's been several years since that's been the case.

Oli, I don't think fixed term contracts in and of themselves are an evil. My main gripe is in all but a few exceptions there is NO alternative. Just recently some of the big providers have followed Virgin's lead in offering pay as you go, and month to month pricing at non-ridiculous rates, but it's still the exception rather than the rule. A fixed term to get a deal on a phone, great. No problems. A fixed term because there is nothing else available: not so great.