Free cell phones

Just in case you thought I was selling out to the US wireless industry with my previous post, check this out:

After looking over some phones on the Nokia website, I thought of all of those "free" phones carriers like to give away.

Here's one for comparison. The Nokia 6085 is offered in the US by AT&T wireless. Their website says it retails for $189.99. My gosh! Oh but don't you worry, as long as you sign up for two years of service (and do so online) we'll discount our $190 phone to $39.99 and then give you a $39.99 discount (you're buying online, remember). OMG! Free phone! See how that works?

Funny enough, Nokia offers the phone (just the phone) on their US website for $118. That means that right off the bat, AT&T wireless is jacking the price of the phone up $60 just for the pleasure of buying it from them.

Some of you might say "Hey, a $60 markup isn't that bad". Yeah right. AT&T wireless is NOT paying $118 for that phone. I wonder how many of them they sell and what kind of special pricing Nokia gives them. Probably not even close. Probably not even half that. I bet AT&T still makes money at the $39.99 price. I also wonder how many they sell at $189.99...

Here's the catch. They are going to give you the same contract and charge you the same price whether you get the "free" phone or bring your own. That's what sucks about the wireless industry in the US. Unlike the rest of the world, Americans can't be bothered to buy their own phone and bring it to the carrier for service. Maybe it's because we've got some different wireless standards and there could be confusion (iDEN, CDMA, GSM, etc). More than likely it's because the wireless carriers know they can make out like bandits otherwise.

The coupling of the phone to the service is inherently wrong and evil. Some carriers (Verizon Wireless) don't even activate phones who's ESNs they don't have in a database. All to "protect the network". Yeah right. If your network is going to go down because I want to use a CDMA cell phone I bought from Sprint a year ago you've got some serious network issues...

At least there is some light at the end of the tunnel. Soon enough cell phone carriers will have to pro-rate early termination fees. It's tough to lock someone into a contract with a $200 early termination fee to cover the cost of the $40 phone you "gave away" almost two years ago.