Should we buy cellphones for $5 or not?
July 5, 2008 3:29 PM Subscribe
The AT&T Pay As You Go "go phone" has a Motorola C168i with a color screen, at Best Buy or Radio Shack they cost $15 cash and come with $10 worth of airtime. Even if they are Made In China, can the Motorola phone itself only cost $5 US to manufacture?
Also, many people I've discussed this with seem to think that if you buy several of these phones and treat them as "disposable", you get put onto a watchlist as a suspected terrorist or drug dealer. Can that be legal? Did the PATRIOT act (II, III, IV, whatever they're up to nowadays) make this legal? Is that just paranoia of the people I've talked to? Do we even dare to discuss this topic on the Internet?
Also, many people I've discussed this with seem to think that if you buy several of these phones and treat them as "disposable", you get put onto a watchlist as a suspected terrorist or drug dealer. Can that be legal? Did the PATRIOT act (II, III, IV, whatever they're up to nowadays) make this legal? Is that just paranoia of the people I've talked to? Do we even dare to discuss this topic on the Internet?
Best answer: Also, the airtime doesn't actually cost 'em ten bucks.
posted by box at 3:54 PM on July 5, 2008
posted by box at 3:54 PM on July 5, 2008
I believe [redacted] is [redacted] because the [redacted] [redacted] so that the [redacted] aren't [redacted].
Just kidding.
I think the pay-as-you-go phones are so cheap because they know that everyone ends up paying way more than they expect for the (expensive) airtime on those plans.
posted by loiseau at 3:54 PM on July 5, 2008 [1 favorite]
Just kidding.
I think the pay-as-you-go phones are so cheap because they know that everyone ends up paying way more than they expect for the (expensive) airtime on those plans.
posted by loiseau at 3:54 PM on July 5, 2008 [1 favorite]
1st question: No, but it's likely not worth more than $30-$40. The idea is to offer cheap phones up front and recoup the cost in charging more per minute as is typical with pay-as-you-go phone plans. A typical person might spend $100 on their go-phone per year even using at a minimum, as minutes expire in a certain amount of time ($15 lasts a month, $25 lasts three months, etc.).
2nd question: The phone and additional-minutes phonecards can be purchased with cash, offering total anonymity. This is why dealers use them. A list wouldn't be very effective.
On preview: what they said.
posted by cowbellemoo at 4:01 PM on July 5, 2008
2nd question: The phone and additional-minutes phonecards can be purchased with cash, offering total anonymity. This is why dealers use them. A list wouldn't be very effective.
On preview: what they said.
posted by cowbellemoo at 4:01 PM on July 5, 2008
Best answer: The going rate for an unlocked C168i appears to be about $30, and the reported margin on low-end phones varies, depending on the source. (This piece on Nokia talks about a 17% margin; this one on Motorola says it's more like 2-3%.)
The markup is on the airtime. That $10 credit certainly doesn't cost the network $10 to provide, and subsequent topups at vendor-locked PAYG rates will be at higher rates than contract plans.
The latest Gillette sixteen-blade wonder razor ain't sold at a profit either.
posted by holgate at 4:06 PM on July 5, 2008
The markup is on the airtime. That $10 credit certainly doesn't cost the network $10 to provide, and subsequent topups at vendor-locked PAYG rates will be at higher rates than contract plans.
The latest Gillette sixteen-blade wonder razor ain't sold at a profit either.
posted by holgate at 4:06 PM on July 5, 2008
Also, many people I've discussed this with seem to think that if you buy several of these phones and treat them as "disposable", you get put onto a watchlist as a suspected terrorist or drug dealer.
Not if you pay with cash. They don't ask for ID.
posted by mr_roboto at 5:08 PM on July 5, 2008
Not if you pay with cash. They don't ask for ID.
posted by mr_roboto at 5:08 PM on July 5, 2008
Also, many people I've discussed this with seem to think that if you buy several of these phones and treat them as "disposable", you get put onto a watchlist as a suspected terrorist or drug dealer.
Not if you pay with cash. They don't ask for ID.
Just don't buy more than two or three at a time.
posted by Floydd at 5:17 PM on July 5, 2008
Not if you pay with cash. They don't ask for ID.
Just don't buy more than two or three at a time.
posted by Floydd at 5:17 PM on July 5, 2008
The phones that make it to the pay as you go market seem to be the successful older models or ugly-cousin to more recent successful models... The pay-go dealers then lock the phones down (sim card locks, handset locks, etc) and make their profit on the combined cheapness of the phones and overpriced airtime rates.
posted by acro at 7:43 PM on July 5, 2008
posted by acro at 7:43 PM on July 5, 2008
Note that the price you pay for bottom-line PAYG phones is usually inverse to how much you're going to pay-per minute for the service - AT&T's/Cingular's pay-as-you go plan is practically highway robbery - Either ($.25/minute) or ($.10/min with a $1/usage day surcharge), $.20/ea SMSes and just plain gawdawful data rates.
By comparison, if you sink $100 into a T-Mobile card, you can get the same $.10/min without any surcharge that lasts a full year, and $.10/ea SMSes. No Data except their private-garden WAP, however.
It's much harder to find a $5 T-mobile PAYG phone, however.
posted by Orb2069 at 9:47 PM on July 5, 2008
By comparison, if you sink $100 into a T-Mobile card, you can get the same $.10/min without any surcharge that lasts a full year, and $.10/ea SMSes. No Data except their private-garden WAP, however.
It's much harder to find a $5 T-mobile PAYG phone, however.
posted by Orb2069 at 9:47 PM on July 5, 2008
You might be referring to the 'MEdiaNet' bundle, which IIRC is only available on PickYourPlan - basically a contractless month-to-month account with credit card autobill (You pay $x/month for buckets of minutes and data), which has almost none of the benefits of their actual Pay-as-you-go.
Cingular was always shifty about actually telling you what the actual data rates are in real PAYG, but the contract does mention that "Text /Instant Messaging and MEdia Net are automatically included at no monthly charge. Just pay as you use." and "Data usage is billed in full-kilobyte increments, and actual transport usage is rounded up to the next full kilobyte at the end of each session."(here) When checked a few years ago, it was $.01/Kb, but it may be higher now. I remember several horror stories of people tethering and browsing for a bit but being stopped by their account running dry $30 later.
posted by Orb2069 at 7:23 PM on July 9, 2008
Cingular was always shifty about actually telling you what the actual data rates are in real PAYG, but the contract does mention that "Text /Instant Messaging and MEdia Net are automatically included at no monthly charge. Just pay as you use." and "Data usage is billed in full-kilobyte increments, and actual transport usage is rounded up to the next full kilobyte at the end of each session."(here) When checked a few years ago, it was $.01/Kb, but it may be higher now. I remember several horror stories of people tethering and browsing for a bit but being stopped by their account running dry $30 later.
posted by Orb2069 at 7:23 PM on July 9, 2008
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This thread is closed to new comments.
Also, read the fine print on the contract. Sometimes there are penalties if you don't use the phone enough, which effectively comes down to a minimum monthly charge.
As to the latter part of your question, I think you worry too much.
posted by Class Goat at 3:52 PM on July 5, 2008