Service Providers Supposedly Break Even 5 Months Into 2-Year Plans

By Rico, 10:10 am Thu Jul 2 2009 - Featured, Rumors - What Do You Think?

To be clear: this is a rumor. You know those free phones you get when you sign up for a 24-month contract with cell phone service providers? Seems the providers start making money off you 5 months in.

The process long known as subsidizing cell phones usually involves service providers signing up new users at a loss. Basically, the provider pays for a phone and offers it for free or at a much lower price, on the condition that a subscriber commits to paying a set monthly fee over the next two years. Numerous users have agreed to such contracts to get the latest high-end phones without investing too much money immediately, and now it seems obvious to me that cell phone subsidizes are a great way for providers to make money over the long-term.

But again, this is just a rumor: anyone out there who can verify this anonymously? Email us at editor -sa- technogra.ph (replace “-sa-” with “@” of course).

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