Originally Posted by elesjuan
I hear the same thing about cable or internet services.. They offer you a year of service for $20.00 a month when typical service would cost $50, then the person bitches because they're expected to pay the second year at $40 a month.
This bothers me.
Why does the typical service cost $50?
What the hell are they doing that would possibly make it undesireable to do business with me for $20/month for basic cable in the first place? What the hell is the marginal cost of one more customer? It's certainly not timely customer service, that's for damn sure.
If they can offer me service for $20/month for the first year (and I've never had a cable company ask me to sign a contract in the first place) then why the hell do they think they can charge me $50/month for the second year? They must absolutely be under the assumption that I'm too damned lazy or retarded to simply switch to the other cable company and get their *first year* deal for a year....before coming back. My friend had a problem with his cable company, so he called them up and bitched and complained and threatened to switch cable companies. Do you know what they did? They gave him 6 months of FREE cable so that he wouldn't switch. Do you know what that tells me? Cable companies have so little money wrapped up in the marginal cost of one more customer, that they are willing to forgo revenue from a customer for HALF A YEAR in order to ensure that they don't lose a customer permanently. At $50/month, they have just lost $300 to him - at what cost to profits? I'm willing to bet that once he starts paying for his cable service again, they will break even on profit within the first month.
"Competition in the communications industry in America?" What a ******* crock of ****. It's nothing more than a government legitimized oligopoly.
Now, contracts with cell phones....I can let that fly.
I would be much happier if I were offered a no-contract option which worked like this: If I select "no contract", I pay for the full cost of the phone. The additional money I pay for the phone is then divided by 12 (so If new contract customers get a $300 discount on all new phones, that over 12 months would be $25/month) I've decided it should be 12 months because sprint offers me an upgrade every 12 months, unlike 18 or 24 months with the other guys. This tells me that they expect to break even on the discounted phone within 12 months. That $25/month should then be a discount applied to my bill every month, indefinitely.
Under the current scheme, if I keep my same cell phone for more than a year, the cell phone company win big time. Under my plan, the consumer wins if he can keep his phone in one piece for any more than a year. Of course consumers will still have the option of selecting the contract option.
Speaking of cell-phone prices and consumer extortion. I was able to spend a less-than-lovely year in rural Egypt. As most of you all know, Egypt is a third world country. The only thing that keeps Egypt from being thought of by most Americans as an equivalent of Syria, or Iraq, or Jordan, or Sudan is the simple fact that it has giant rock piles. If Egypt didn't have giant rock piles (and trust me, the Egyptians that live in Egypt now are NOT the descendants of the Egyptians that built the rock piles) it would literally be just another shitty third-world counrty. That being said, the consumer base for cellular telephones is relatively small compared with the US. When I was in Egypt, I purchased a relatively simple Nokia with global GSM technology for $80, no contract. At the same time, I purchased a pre-paid card for the phone for $20.
Now I was in Egypt for military reasons, so it wasn't like I was going for days or weeks at a time without callling anyone. Quite the contrary, I usually expected to have at least one short conversation per day, and on occasion, it would be maybe 3 or 4 per day.
That $20 prepaid card lasted me an entire YEAR. Broken down over $12 months, I had cellular service for less than $2/month. I don't know if I ever got close to actually using all of that $20 either. At the end of the year, I gave the phone to my replacement with service still active. For all I know, I could have used less than half of that.
Now compare that with what it costs for simple cellular service here. Consider that this third world country had probably far less than one cellular phone per familly versus the united states with more than one cellular phone per person. It's quite obvious to me that the average cost of me, a simple phone user, in Egypt was less than $2/month.
AND THAT'S THE AVERAGE COST, NOT THE MARGINAL COST.
What do you think the average cost of a simple cell user in the US is? Surely we have MUCH greater density of cell phones than Egypt does (though probably nothing compared to the cell phone density of South Korea or Japan) and so it should be significantly cheaper than Egypt. After all, more phones per tower means you're spreading the cost of the tower over more users, right?
If I get a basic talk + text cell phone plan from Sprint, I have to fork out a minimum of $35/month. Does that mean that it costs Sprint nearly $35/month to provide me service? I think not, and I think it's bullshit.
Back before color cell phones existed (and I did end up owning the first color phone on the US market) I had a cell phone with a data cord. If I connected that data cord to the serial port on my laptop computer (which I occasionally did) I could use the phone as a modem and dial sprints internet connection (something like *999 on the phone) and surf the web over my cell phone on my computer.
Anyone care to take a gander at how much it cost me to tether to the internet through Sprint?
It was free. Un-******* believable. I paid like $30/month for calling and I got free internet access through a cable and software that Sprint *provided*. Sure, it wasn't 3G or anything fancy like that, and I had to set the baud rate for the data connection in the phone's settings menu.
This is what that bad boy looked like:
Not exactly tiny, the thing was probably 1 1/4 inches thick. I got it as a hand-me-down from dad, it was probably his 3rd or 4th phone, and probably his first that wasnt a bag-phone.