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Industry EconomicsCustomer Acquisition costRunning a cellular network costs the service providers quite a bit of money. On top of the massive infrastructure costs, there's staffing, advertising, billing, and a host of other business costs to consider. Estimates say that on average the major providers spend $350 on each new customer they sign up, so they need you to spend at least that much on their services just to break even. As such, it's in the provider's best interest to keep you as a customer for as long as possible once they have you under contract.While competition amongst carriers dictates that they offer consumers the best rate plans possible, it's no secret that the more they're able to bill you each month the happier they'll be in the long run. As such, you've got to spend at least $39.99/month to get the best deals from the major carriers. Cheaper plans not only represent a higher price per minute initially, but they often involve bigger charges for overage minutes and add-on services like text messaging. Once you move into the $40+/month plan category, you'll find carriers are more willing to woo you with deals on nicer phones, service packages, and less costly overage and data charges. Remember, every extra dollar you're contracted for per month is $12 per year they back towards their initial $350 in signing you up to begin with. The more you spend each month, the faster you become profitable to them. New services are key to a cellular provider's long-term wellbeing. Voice data has become such a commodity over the past few years that carriers have no choice but to look elsewhere for new sources of revenue. Remember when free long distance was hard to come by from a cellular provider? Nowadays any consumer willing to sign a two-year contract expects things like free long distance, free callwaiting/three-way calling, and even free mobile-to-mobile calling to be part of the package. As such, cellular providers must up the ante with attractive new add-on services like high-speed data services, Instant Messaging, and automatic news, stock, and sports information "pushed" to your phone. Again, the more add-ons they can get you to sign on for, the faster you become a profit maker for them. Equipment Costs and Dealer CommissionsCellular dealers rarely if ever make money on the phones they sell you. Their money is made from the service fees, as described above. Corporate stores and independent dealers alike often take a financial loss on when offering free or discounted handsets and other equipment, but it's worth it for them because of the money they make on your service contracts.Corporate stores, obviously, reap the monthly fees they charge for your voice and data service, while independent stores make their living primarily from the commissions they collect from carriers for each new customer they sign up. Bear this in mind when shopping for new service, as corporate and independent stores alike are usually more than willing to negotiate a good deal on handsets and accessories if you're willing to sign a new service contract. Online MerchantsThe Internet has changed the cellular phone industry much in the same way as its affected all other areas of retail sales. Established stores can expand their customer base with the addition of a strong Web presence, while new "online only" operations can get into the retail game with minimal overhead by selling only through a Website and never even opening a "bricks and mortar" store.Cellular carriers and independent dealers alike often advertise special "Web only" deals on handsets and accessories, as the cost of doing business online is less for them than selling phones in person. While independent retailers can't actually offer reduced rate service plans — those prices are set and controlled by the cellular carriers themselves — they will often advertise better deals on phones and accessories than can be had in the carriers' corporate stores. Many free or discounted handset offers require a mail-in rebate, so be sure to read the fine print and ask questions before signing any contracts you're unclear about. When ordering service or equipment online, bear in mind that independent dealers can't help you if you have technical or billing questions once your new service has been activated. They're the ones to go to if you have any problems with your new equipment, but you'll still have to deal with the carrier themselves if you have any service-related issues. For many people, this is a non-issue, but some folks prefer the convenience of being able to address equipment, service, and billing problems all in the same place.
Transport feesAs mobile phones have become more feature-laden and sophisticated, third-party vendors have started offering ringtones, wallpapers, games, and other handset goodies for download. Some of these extras are free, some are only available for a fee, but all of them are subject to your carrier's transport fees.Transport fees refer to the cost - usually measured in cents per byte - that a cellular provider charges for data transfer over their network. Technically the term can apply to data costs associated with email and Web services, but usually "transfer fees" is used in conjunction with the downloading of an independent vendor's offering. So when you're surfing the Web in search of the latest ringtone, don't forget to add your carrier's cost-per-megabyte fee to the cost. Our fancy algorithm says this stuff is related...Friday, November 28, 2008I am looking to buy a replacement phone for service I have with Immix Wireless. They do not appear on the list above. Would it be safe to say that any unlocked GSM 1900 phone would work with the carrier? Saturday, November 08, 2008The site is great for those who are quite unfamailiar with the mobile and communications terminilogy. Thanks to phonedog. :) Wednesday, November 05, 2008hello,
i was wondering if T-Mobile would reject me for a free phone for their flexpay service, if on my credit report i have already verizon and sprint on my credit? i mean they werent defaults on payments just something that went wrong with billing that both companies would not fix cause it was not their fault.
but will T- Mobile deny me? Wednesday, November 05, 2008I have had a nice information from your website. great site.thx Wednesday, October 29, 2008hey Linnea,
Nokia N95 would be good for you. It has Wifi, 3G, GPS or maps, mp3 player and you could install a lot of good applications as well. I have the 8GB version and I'm with T-mobile. Saturday, October 18, 2008I need a phone with good GPS and instant messaging and Wifi and a big screen, speaker phone, voice command, of course bluetooth. I'm with T-mobile. What can I get that those things will work on their network? Like the GPS, will it work there with full data. I was set on the instinct then saw that there is no Wifi, oh and need something that can tether to computer for modem with on the boat! I have to buy soon so any help would be really great. Thanks Wednesday, October 15, 2008thats like saying its not worth it to pay your car insurance. i have a pda with tmobile and only paid a quarter of it to get a new one when it broke. its was sooooo worth it not to have to shell out another 500 for a new pda. Tuesday, October 14, 2008If I buy the Nokia n81 from the website can i use it for AT&T and T-mobile? and i live in the US. Thursday, October 02, 2008I live in a rural area. I just got a new Nokia 6555 and the signal reception is terrible. What phone has the best signal reception?? Sunday, September 14, 2008I have a verizon phone and i have to admit it`s great. Before I had tmobile but they were terrible. service sucked and the costumer service was crapy too. I bought the phone from small store retailer in brooklyn and i m happy with it. As far as online stores i think people are still not trusting online as person to person sale. I know yodaphone.com is pretty good at this with bunch of other sites. Cheers. Sunday, August 31, 2008hi noah,...i just wanna know how much is the LG env2,...
cauz i just wanna buy the phone only,...and it can be carry by verizon wireless,....and which is the better, env2 or sony ericson w580i??,....please,..reply to my questions,...thank you Sunday, August 24, 2008hey how are you doing Friday, August 22, 2008I have a helio fin phone and i haven't seen any reviews on it. I just wanted to know if i missed out on the episode. i really like this web site and thanks for all the hard work. Ray Wednesday, July 30, 2008iwantacelluarphonedownloadringtonesandbluetooth.andmustin31087zipcode. Tuesday, July 29, 2008I have had a nice information from your website. Keep it up! Tuesday, July 22, 2008Which firm would you go with for a two week GSM phone rental for use in Japan, with v/mail, calling to and from U.S.? Thursday, July 17, 2008Is there any plan that does not require a two year contract to start service. I have t-mobile, my contract is running out, but I am upset with the service we have had and don't want to have to commit to another two years, tho I can't seem to find a plan that works better for us
Wednesday, July 16, 2008I lost my ATT (GSM) phone and would like to buy a replacement so that I do not have to extend my existing phone plan. Because my phone is lost (fell in the bay), I cannot exchange the SIM card. Can I still buy a replacement phone with this plan? Friday, July 11, 2008this is informative1! can i have it please? Thursday, June 26, 2008Thanks for the good information on Insurance.. I thought I was the only one who thought it was nuts, but I never realized it was that bad. I think a manufacturer's warranty is good enough for me, but the Ebay idea is really smart! |
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