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What Price Freedom? $14.58 A Month

posted Jan 13, 2010, 9:59 AM by Allen Gattis   [ updated Jan 17, 2010, 11:42 AM ]
A friend recently remarked how glad he was not to be under contact on his cell phone any longer. I replied that every month he was free, he was paying for a new phone that he wasn't getting. 

No way he said, it's that the TelCo finally stopped paying you, in the from of a new phone, to not switch providers. That your cost didn't go up, you were't loosing anything, and that a phone you didn't need offered you no value. (And trying to sell a phone that the TelCo gives away for "free" is pretty hard!)

So which is it?....Turns out it's an illusion of choice argument.

When you initiate service with a TelCo, you receive two value streams. One is the service itself, the other is handset. If you already have a handset, it doesn't matter. You can't get the service for less.  (You can't even initiate service without signing a contract for a limited term, that I could find)

You may believe you have Freedom Of Choice, but in fact you don't. Since no TelCo offers a service-only plan you will continue to pay for both value streams, at any carrier you go to - and they will require you to sign a contract to initiate service. Not being under contract at a given point in time offers no value because choosing to exercise that freedom offers no value (and will immediately put you back under contract anyway)

(This assume you didn't willing sign up for a service you cannot use, etc, and TelCo let you switch in most cases, I've read, if you move to a new location)

He was OK with that. But what does that cost? If you take the Google Nexus as an example,  $529 without wireless service, or for $179 with a two-year contract from T-Mobile, the cost is $14.58 a month.

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