Why a new contract thru cell phones all the time?

@dookie03 (578)
United States
November 3, 2008 3:54pm CST
Do you ever wonder why all the good deals for cell phones need another years contract? I'm going to get a new cell phone next week because they sent us a card saying were good for a upgrade. I'm curious why they always charge you out of the but unless you sign another contract for another year or two. It's always bugged me it's like they treat the new members with good deals and they treat the old members that have had service with them forever like crap. I don't get it.
1 person likes this
2 responses
@tcage08 (88)
• Canada
3 Nov 08
Well, for a couple reasons: (1) It's easier to retain old cusatomers than acquire new ones..hence why they get the better deals. It's kind of backwards-logic to most industries, but it used to be not that easy to switch companies (you'd have to get a new number, sign a new contract term, pay activation fees and such). Most of those are gone now though so this may change n the near future. Still though in a cell phone is a cell phone, so incentives are one of the few ways companies can compete for market share. (2) The reason for the contracts is so they can make their money off you. If they are giving you $200-300 off on a phone, they want to recoup all that and more in service fees..so of course they are getting you on a contract so you dont jump ship after a couple months and leave them "at a loss" financially. The reason new customers get better deals is usually they sign longer contracts as well.
@dookie03 (578)
• United States
4 Nov 08
Wow that totally makes sense. How did you know that did you work for a cellphone company at one time or are you just good at marketing?
@underdogtoo (9599)
• Philippines
3 Nov 08
It bugs me too and that is why I use prepaid cell phones now. I find that I can control my cell phone bills much more easily. Cheers!!