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Deal of the Day by Lisa Scherzer (Author Archive)
Switching Carriers to Get the iPhone Can Cost You
FOR IPHONE FANS eagerly waiting to get their hands on the latest version of Apple's (AAPL) wonder device, the agony of anticipation is almost over. On July 11, the iPhone 3G will hit store shelves.
One week ahead of the release, wireless carrier AT&T (T) offered details on the iPhone's pricing plans. The most attractive part? Eligible customers (mainly people who sign a new two-year service contract with AT&T) can buy an 8GB iPhone for a subsidized price of $199 — a fraction of the phone's original $599. Add to that the latest version's nifty new features — better battery life, a built-in GPS chip and 3G functionality for high-speed mobile web browsing — and the deal seems even sweeter.
The not-so-sweet reality, however, sets in when those who aren't currently AT&T subscribers start thinking about how much it will cost them to defect from their current wireless carrier. Sacrificing the remainder of an existing contract for the new "it" phone could end up costing some users more than $400. Here's what you need to consider before jumping on the iPhone bandwagon.
Breaking an existing contract
Planning to break it off with Sprint (S), Verizon (VZ) or any other carrier that's not AT&T? You need to figure out how much that divorce will cost you first. Leave Sprint prematurely, for example, and you'll get hit with a $200 penalty (see our chart below for early termination fees for all major carriers).Buying the phone
It's hard to argue with the deal AT&T is offering new customers: Sign up for a two-year contract, get the 8GB 3G iPhone for just $199. Need a little more storage for all your music and movie downloads? Buy the 16GB version for $299. Either way, it's a steal compared to the $599 early iPhone adopters shelled out last year for the original 8GB model; not to mention the $399 (8GB) and $499 (16GB) existing AT&T customers — who aren't eligible for an upgrade — will get charged for the latest version.But if you have to pay your existing carrier $200 to break it off, that savings shrinks significantly. Given the stream of so-called "iPhone killers," such as Samsung's Instinct (retail price: $449; with two-year agreement at Sprint: $129) and HTC's Touch (retail price: $200; with two-year contract: $100) making their way into the market, it may make more financial sense to stay put with your existing carrier and buy a comparable device instead. (OK, we admit, won't be an iPhone, but some trade-offs may be worth it).
Activation fee
Also, if you make the switch to AT&T be prepared to get dinged with a $36 activation fee (existing AT&T customers have to pay $18).Here's what it will cost to forsake your current carrier for the iPhone:
If your carrier is... | Early Termination Fee | iPhone 3G (8 GB model) | Activation fee | Total |
Verizon Wireless | $60-$175 (The amount is reduced $5 per month for each full month toward the contract's term the customer completes.) | $199 | $36 | $295-$410 |
Sprint | $200 (The company has plans to introduce a prorated early termination plan by end of 2008.) | $199 | $36 | $435 |
T-Mobile | $50-$200. Charge is $200 with more than 180 days remaining on contract; $100 with 91-180 days left. For those with fewer than 91 days remaining, T-Mobile charges either $50, or the customer's standard monthly charge, whichever is less. | $199 | $36 | $285-$435 |
Alltel | $200 flat fee no matter how much time remains on the contract. | $199 | $36 | $435 |
Don't Forget to Weigh Data Plans
Considering that you're locked into AT&T's data plan for two years, you want to make sure it's something you can afford. AT&T's voice and data plan starts at $70 a month for unlimited email and web access, 450 anytime minutes and 5,000 night and weekend minutes. That's a little bit cheaper than plans offered at some competing carriers. (Verizon's BlackBerry Nationwide Email package, for instance, starts at $80 for a comparable package.) There is one catch to consider: AT&T's plan doesn't include text, video and photo messaging. You'll have to fork over an extra $5 a month for 200 messages. For messaging junkies who go over that limit, the AT&T plan can get a bit pricey if you aren't careful.Freedom Comes at a Steep PriceOne of the biggest complaints iPhone fans have is that they are tethered to AT&Ts service. To address the issue, AT&T recently promised that, "in the future" it will offer a contract-free iPhone to customers who don't want to sign up for a two-year contract with AT&T. Those customers will have to pay a premium, though: The phones will cost a whopping $599 (for 8GB) and $699 (for 16GB).Indeed, the impetus behind the "no-contract-required" option is to convince people that signing on for two years with AT&T is much more cost-effective, says Michael Gartenberg, research director at Jupiter Research. "It's a way to tell people: If you want the device, first, it's not going to be available like that for some period of time. And you're also going to have to pay a lot more," he says. Even worse: The no-contract iPhone must be activated by AT&T and will only really work on AT&T's 3G network, says Ian Bell, president and editor in chief of Digital Trends, a technology review site. "Why would you spend $600 on a phone without a contract if it only works on AT&T anyway?" he says. If you really want 3G at its maximum capability, "you're going to want to do business with AT&T," says Gartenberg. |
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Sprint screwed me too. I had to contact a consumer reporter at my newspaper to get them to stop AUTOPAY on my credit card. They overcharged me FOUR months in a row. No one would help when I called OR stopped in the store.
I hope every person who played a part in providing their crap customer service enjoys their new employment at McDonalds.
As for me, I no longer have a contract with them and will be enjoying my new iPhone and service with AT&T.
The other poster is RIGHT. Sprint continues to shoot themselves in the foot.
WHY SPRINT WILL CONTINUE TO LOSE CUSTOMERS:
'Can You Hear Me Now, Sprint?'
By Bill Saporito/Jul. 11, 2007
Dear Customer: You're fired. Beat it. Scram. GFY. We're way too big for your two-bit account, especially since you never stop complaining about it.
Go bother someone else for $29.99 a month.
So went the letter that Sprint sent to its Biggest Pain in the Butt customers, thus eliminating 1,000 mobile users who take up so much time complaining that they're not worth keeping.
www.time.com/time/business/article/0,8599,1642245,00.html
Sprint CEO says turnaround to take many quarters
Feb 28, 2008/REUTERS
Sprint Nextel Corp (S.N) Chief Executive Dan Hesse said on Thursday the company faces a difficult 2008 and would take 'many quarters' to accomplish a turnaround and rebuild its wireless brand.
'To be frank, the issues we...(Read more of this comment)
Given the poor customer service from Sprint, even paying up to $1,000 is not too much to get on the iphone and enjoy service from AT&T. Sprint had plenty of chances to keep me. The best they could do was offer me a discount on an upgraded phone and that would still cost me $300. Some discount! Thanks but no thanks. Can't wait to get my iphone!
tmarion, I'm surprised to hear that your daughter couldn't send text messages to Verizon users from Sprint phone/network. I'm a Sprint customer and a heavy user of text messages. I'm texting a lot. I text my friends in the US as well as internationaly. It is cheaper for me to text internationaly then call. An international text message is only 15cents, and Sprint has no limit on the number of characters you can send. Of course it is limited by the phone you use. I had no problems, with my friends not receiving my messages. And no, they are not Sprint customers, especialy when you talk international friends. All in all I'm happy with my Sprint service.
I got the Samsung Instinct from Sprint as un upgrade for $129 and it is a very good deal compared to the iphone. And I have a good plan for a good price too. I have the talk/message/data share, 3 phones on this plan and I pay only $149.98 a month. This is what I get for the money:
1500 anytime minutes,
Unlimited data and me...(Read more of this comment)
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Sprint takes its customers for granted. Or doesn't care if they lose them. I'm guessing this kind of attitude must come from the top and filter down. Sprint's stock isn't exactly a barnburner. Maybe the company is going out of business and they're just trying to get as much money from anyone they can find. In other words they appear to have little or no regard for customer retention.
Less than 48 hours until I get my iphone! See you Jimmy!