Why is my cellphone company charging me 200$ more for an iPhone than a new customer?

[exigeracer]

Deets:

Company A had an exclusivity contract with Apple to carry the iPhone. That contract expired, so Company B (my provider) just started selling them this week. The offer to new customers is 300$+contract for the 32GB 3GS, or 800$ outright.

I have wanted the iPhone since it came out, but I've been bound by contract to Company B, so I couldn't ever switch to Company A without spending a small fortune on cancellation fees so early in my contract. I went in to see how much it would run me to get set up with a data plan and a shiny new Macintosh telephone. They insist that clients with existing contracts can only upgrade their plans to an iPhone service at a 150$ discount off the outright price and with a 3-year contract. They fold to 200$ without much fuss, saying they're doing me a favor.

They're still charging their existing client 600$ for the phone with a 3-year contract, double what they are trying to hook new customers with. I get on the phone with their hotline/customer help/whatever line. They look at my record with the company (2 years, 2 months, 9 days of service) and insist that it's a policy that cannot be changed, regardless of what position they hold at the company. They finally bump me up my hardware credit to 300$, the most anyone can have, and condescendingly ask for thanks. This is still 200$ more than what a new customer gets, and 200$ more than what Company A has offered since day one. Nobody that works at Company B can offer me a reason why, they all agree with me, and can't tell me who can take responsibility. They refer me to their loyalty department, but intentionally make it difficult for me to reach that line.

Why doesn't Company B want their existing customers to enroll in a higher-profit contract?

(random side-note: Apple barely gave Company A the exclusivity on the iPhone because the rates they wanted to charge were so incredibly high. Nothing has changed across the market, which is one of the highest in the world)

 

[Kylehnat]

I'll never understand this, either. Obviously, companies use this tactic to draw new customers in, but once they do, they adopt the "🤬-'em" attitude. It's ridiculous, especially since the iPhone was only available on one provider. I'm with that provider (for four years now), and when I upgraded my phone this summer, I had the option to upgrade to an iPhone for the low, low price of $299. Huh? Screw it...those 100,000 aps don't interest me .

 

[Joey D]

It's an unfortunate thing with mobile phone companies, in the end they just don't care and want to screw you around as much as they possibly can to make money off of you. I can't tell you how many countless hours I've spent between the three companies I have used in the past to try and get somewhere with them. Although I can't understand why the iPhone is so expensive up in Canada. I got mine for $99 when I upgraded over the summer, it was much cheaper than a Blackberry and was far more useful to me too.

Have you tried and independent store to see if they can cut you some sort of deal? I know Best Buy around here will typically give you a better deal than a carrier's own store. I'm not sure how the mobile phone system works in Canada though, or even what providers offer things.

 

[exigeracer]

So I spoke to Company B again for quite some time yesterday. They claim they offer higher costs to existing customers because they haven't recovered the losses from my initial free cellphone when I signed up 2 years ago. I point out that I've had a hardware credit for a while, which means I've made them their money back on the Motorolla I use. She couldn't answer me. She offered me free texting and free voicemail for 3 years (which is worth over 500$). This offsets a bit of what was going on, but still isn't right.

I'll be shopping around, including the independant places. They're harder to bargain with than going directly to the provider's outlet.

 

[Jondot]

So I spoke to Company B again for quite some time yesterday. They claim they offer higher costs to existing customers because they haven't recovered the losses from my initial free cellphone when I signed up 2 years ago. I point out that I've had a hardware credit for a while, which means I've made them their money back on the Motorolla I use. She couldn't answer me. She offered me free texting and free voicemail for 3 years (which is worth over 500$). This offsets a bit of what was going on, but still isn't right.

I'll be shopping around, including the independant places. They're harder to bargain with than going directly to the provider's outlet.

Well that's just it. When I was halfway through my contract I had to simply buy my new phone outright. No company is going to let you upgrade for nothing when you haven't reached their designated number of months. It's a bit cheeky when you've basically paid off your phone already, but there we go. Frankly you've done well to bargain them down to that level - the phone companies we have in the UK won't budge an inch unless the end of your contract is in sight.

 

[Northstar]

There is a somewhat basic reason companies do this(mostly in the TV service/phone world). It basically has to do with the contract. With existing customers they are guaranteed to get money every month(as long as you are responsible and value your credit that is) or they will get a chunk of cash if you cancel. Whereas with a new customer they obviously don't, so they offer incentives to try and get them to sign a contract.

 

[Eric.]

Would you accept settling with a used iPhone (3G maybe?) from eBay or something until your contract does run out and you can get fourth generation iPhone new by then?

 

[exigeracer]

Would you accept settling with a used iPhone (3G maybe?) from eBay or something until your contract does run out and you can get fourth generation iPhone new by then?

Already picked up a 32gb 3GS for a premium over new customers but will be saving money over waiting for the contract to expire in the incentives they threw at me when I called them and complained.

 

[GilesGuthrie]

For next time, just threaten to quit. They'll price-match in a heartbeat. I saved £200 on my MDA Vario 4 that way.

 

[exigeracer]

For next time, just threaten to quit. They'll price-match in a heartbeat. I saved £200 on my MDA Vario 4 that way.

There wasn't any budging this time. It was a hyped up release that they had a limit to what deals they could dole out and I had reached that limit. Plus, since the activation between plans took half an hour and not 5 minutes, they gave me free calling for all of December, not that I need it.

In general, it seems as if carriers have caught on to everyone bluffing the contract termination. Everyone used to give that advice, but I've got some friends who were told "fine, and we'll be charging that 300$ cancellation to your credit card?"