Why do AT&T bother to lock your 3G phone?

Because the phones will still function on T-Mobile's (and other carrier's) GSM network(s). How many customers are out there using 3g iPhones on other networks? They can't take advantage of the 3G speed, but they still do it.

 

Anything they can do to protect the phones they sell, they'll do. Locking phones is the result. They're not going to make it easy to use a phone with another GSM carrier, whether 3G or not.

T-Mobile does the same thing. Cingular didn't use to lock their phones until the old AT&T Wireless merger. I had a couple of phones with them that weren't locked when I bought them. Later on everything they released was now locked.

 

None. But don't forget, you're dealing with a large corporation that will take EVERY step to insure their benefit and protect their property. There's nothing in it for them to make it easy, so they don't.

Their network, "their" phones, their choice. It doesn't have to make sense (even with a 2 year agreement in place).

 

As someone who collects and sells vintage landline telephones, I'm not quite sure that the breakup of the Bell System was really a good thing. There were a lot more than 3 models available, especially once the design line was released in the mid 1970's. Ma Bell put a quality telephone in your home. The Western Electric telephones they used were designed to operate an average of 25 years before they required any type of service at all. I have been selling vintage phones for nearly 15 years now at antique & collectibles shows, and I always guarantee the phones for one year when I sell them. In 15 years I only had two ever come back for service.

Now you can own your phone, so you go out to Wal-Mart and spend $10 on a phone that does not have the same sound quality as the original Western Electrics, and when it breaks after a year or two, you go out to Wal-Mart and spend another $10. I have some phones in my private collection that are nearly 80 years old, yet they still operate quite well on the modern telephone system.

 

The AT&T Trimlines sold in the stores today are a lot better quality than the $10 Wal-Mart special, but its still not the same quality that used to be put in your home by the Bell system.

 

True - but you are only obligated to the carrier for the minimum voice plan amount for two years, nothing else. IMHO - part of the "goal" of the carriers in making it difficult to use the device on another carrier's service is to ensure they are actually getting all of your business, including the ancillary services (data, messaging, etc.) that aren't part of the contractual commitment.

To my way of thinking, it's similar to the use of mail-in rebates (which are designed to get you "hooked" on the additional services as well during the 10-12 week period it will take to receive the rebate). These things work in conjunction with each other to help the carrier ensure they are making the desired profit on the equipment sale before the customer can easily use it elsewhere (which also includes the possibility of a customer purchasing a heavily subsidized device and then paying the ETF to use the device elsewhere).

All that said though - I agree that I'd like to see the day where wireless service and the equipment sale is separated in the US. The subsidy arrangement causes all kinds of issues for consumers in my opinion. (reduction in need for quality/price competition and lack of accountability for support/warranty service)

 

I agree with that. If you sign a 2-year deal and get a subsidised phone, the carrier is still making it's $ back on the life of the contract. You paid for the phone (even if indirectly) and it should be yours to do what you want with. In Europe, I've ony seen cheap pre-paid phones sold locked (they count on you refilling them to make the $ back). Almost all phones sold on contract are unlocked (most countries have laws requiring that)

Generally, AT&T will give you the subsidy unlock code if you ask for it tho, so it's not too big of an issue. But since the question was "why do they sell them locked in the first place", yea, I don't get it either. Maybe just out of habit?

 

As much as it kills me, I am going to defend AT&T on this one.

AT&T (and other carriers) subsidize the cost of the equipment. From the tone of your post, it is apparant that you dislike AT&T and their policies. But the device you got got for free or at a discount cost them a few hundred dollars. They also have to pay the folks that sold it to you, support your service and keep the network up and running. Like them or not, they do have the right to protect their investment and turn a reasonable profit.

If you wanted and unlocked device you can find several thousand of them for sale on sites such as eBay or Craig's List.

Also, T-Mobile is not the only other GSM service provider in the USA. There are several regional GSM service providers in the United States.

 

...I don't get your logic. All the GSM/UMTS carriers in Europe sell all their subscription subsidised phones unlocked and still manage to make a profit. They make the money back on the phone over the life of the 2 year contract, which the customer still pays regardless of if he uses the phone or sells it on ebay.

 

Are the plans generally more or less bundled together in Europe compared to the US? Recently we've started to see more of the unlimited voice/data/messaging plans here - but previously everything was sold separately - and the two year commitment is only for the minimum voice plan. In Europe can you lower the voice plan or do you have to continue with the voice plan that you signed up for for the full 2 years?

It's not that I don't think that the carriers make the subsidy back over the life of the basic two year agreement - but I do think they use the initial 90 day period to try to get you as vested in the service (and additional features) as possible - by locking the equipment and using a mail-in rebate with additional feature plan requirements to obtain the carrier's bottom-line equipment pricing. Those things certainly help boost their profitability while the customer is a captive audience and to the extent it continues once the phone can be/is subsidy unlocked, it's additional gravy.

eta: And am I misinterpreting your last statement? Are there no ETF's in Europe? Even if you aren't using the phone/service any longer, you just continue to pay the monthly subscription amount? Here it is typically much less expensive to just pay the ETF than it would be to continue paying a minimum $40/month (at&t).

 

Regarding plans: it Europe, you have more freedom when it comes to picking a plan. You can get a basic voice plan for maybe $15/month, but no minutes are included, and you pay $0.25 per minute. With a cheap plan like that, on a 2 year contract, you'll maybe only get -$100 knocked off the full price of a phone.

...or you could choose a monthly plan more similar to the US-style of paying something like $50/month, and in that case you'll get more like -$400 off any phone you want.

As for ETF's, yes they do also exist in Europe, and are similar in price to the US (maybe $300-400) but if you have a cheap monthly plan (ex: $10/month) it would be cheaper to just pay the $10/month until the contract expires instead of paying the ETF.

 

That's interesting - you've got the opposite scenario re: the cheap European plans - where the ETF far exceeds the subsidy; I can't say it's the case for all subsidized smartphone purchases (I'm only familiar with at&t and don't pay much attention to anything other than the Nokias), but I suspect that generally speaking with the smartphones the carrier's subsidy has exceeded the ETF by a decent amount in the US. (Of course, now Verizon is charging a higher ETF for their smartphones.) And I think the difference is that the European subsidy sounds like it is tied to the *service plan* that is chosen by the customer, and not by the equipment that is chosen (as it is in the US)?

For example, with the E71/E71x - initially when that phone was released an unlocked/non-branded version was approx. $500. By the time at&t released their version of it (E71x) about a year later, the non-branded E71 could be purchased for $375 (on-line and in B&M stores such as Best Buy). At&t initially sold the E71x for $99 after a $50 mail-in rebate requiring the $30 smartphone data plan until the rebate is received - approximiately 10 - 12 weeks after purchase. (This has all changed somewhat now too with the implementation of the mandatory smartphone data plans - mail-in rebates don't seem to be being used much any longer).

So what I've always figured the subsidy lock (in addition to an ETF) is used to accomplish is to give the carrier at least a few months with a service revenue stream (voice + feature packages) in case a customer were to purchase an at&t subsidized E71x for $99 (or even $149 - instead of $375) and immediately pay the $175 ETF because T-Mo really works better for him (coverage, price, etc.), but they don't carry the phone.

 

Oh, I think I see what you're saying. Do you mean they use phone-locking to discourage someone getting the phone cheap with a contract and then immediately paying the ETF just to get the phone less than retail price and then using it on another network? Then yea, Ok, I can see a little logic in that. But then that comes back to the whole messed-up ETF structure. ETF should really be pro-rated and based on the cost of the phone subsidy, not just a single fixed price (of $175 for all phones, for example). Sorry, I don't have much info about ETF's in Europe, I never canceled my contract early :O ...but I can say I've had several different contracts with different carriers in different countries and I never got a locked phone with a 1 or 2 year contract. Never. And I guess they are still making money, right?

So what's different in the US? Actually, given that there's not so many GSM/UMTS operators in the US, I think this would really be less of an issue, since there's not that many other networks that you can take the phone to (versus ALL networks in Europe runing GSM/UMTS)

 

That's the conclusion that I've always come to whenever I've wondered why they do both. That.....and just because they can.....

 

It's definitely nice to see T-Mo doing some things that change the way the game is played. If they had better coverage away from the major interstates here, I'd certainly give them a look.

 

Most carriers do prorate the Early Termination Fee by offering a reduction for each month of the contract. In the case of AT&T, the reduction is $5.00 per month, By the twenty-third month, $115.00 is knocked off the fee. The fee never reaches zero during the contract period. It is down to $55.00 in the final month.

 

People speak of Europe like it's a single country. It's not. It's a bunch of countries which are smaller than the U.S. A U.S. carrier has to build and maintain a larger than any individual European company has to. They then have to negotiate with carriers in other countries for roaming.

 

That is a good point - many European countries are smaller than some of our states and people more routinely travel between countries in Europe.

I think it helps explain why Europeans would not stand for locked phones (so the carriers simply can't do it) vs. in the US, people can pick a single carrier that better provides coverage everywhere they generally need it. So why wouldn't the US carriers lock their phones - if the customers will tolerate it (which we do) and it helps protect their business investment by making it more difficult to use the phone on another carrier - it's simply not as necessary to be able to do so here.

 

That is incorrect. Cingular provided locked handsets, most of which could be unlocked. I can't count on my fingers and toes how many times I had to call in for a subsidy unlock code back in the day. Some of the Cingular branded handsets I was able to unlock myself though.

You perhaps unknowingly purchased phones which were already unlocked, or locked to Cingular service. There is definitely some misunderstanding on your part here.

 

No, there's no misunderstanding. There definitely was a period of time when Cingular was selling unlocked handsets (at least the quad-band ones were unlocked, such as Motorola V400 and early batches of Motorola V551). Those were sold in Cingular corporate stores as well as third party resellers. I personally saw at least five V400/V551 phones that were bought in stores and were unlocked from the get go.

Once the old stock has started running out in early 2005 they switched to locked ones.

 

This is absolutely correct. All of Cingular's GSM handsets were sold unlocked until AT&T entered the picture. I got my triband 6230 in 11/04 which was unlocked and then I got another 6230 in May/05, which was locked.

BlackBerry9700/5.0.0.405 Profile/MIDP-2.1 Configuration/CLDC-1.1 VendorID/102

 

This was the case for me too, also in late 2004, when I purchased the V551 and the SE T637, both unlocked from the get-go.

 

I didn't get it directly from Cingular, but in September 2005 I bought my Nokia 6820 on a Cingular subsidized basis from LetsTalk - unlocked from the get go as well.