On Telecommunications

This article is going to be a little different from most. Normally, articles on this blog pertain to elements of artistic media, such as anime and games. However, because the Consumer Electronics Show was this week, I felt that a certain aspect of it needed to be discussed. Today, I wish to discuss telecommunications in the form of mobile phones, ranging from the technologies they use to how they are financed.

Subsidized vs. Unsubsidized
As it stands today, most mobile phones of high quality are priced in the hundreds of dollars. For example, the Motorola Moto X costs roughly $400, and the Apple iPhone cost anywhere from $299 to $699, depending on model. As these prices are out of range for many citizens, wireless companies provide subsidies to offset the cost, and in return, demand higher monthly charges. For example, with AT&T Wireless, the $699 iPhone may only demand a $199 upfront cost, but will likely include a monthly charge between $70 and $110.

Prepaid companies, such as Tracfone Wireless and Virgin Mobile, require you to pay the full cost of the phone itself, and as such, the monthly rates will always be much lower. You may pay the full $400 for the Moto X, but your monthly payment may only be between $35 and $50. This is how it has been for many years, and there's really been no incentive by the major wireless companies to change their formula. That is, until now.