Subsidized Laptops With Locked In Wireless Broadband Contracts

from the good-or-bad? dept

A few years back, after noting the trend of laptop companies to start building in cellular data modems into their laptops, we wondered when it would reach the stage where mobile operators would subsidize the cost of a laptop, just as they subsidize the cost of mobile phones in many cases. In early 2006, we started to see such subsidized laptops go on sale in Europe, with the mobile operators selling the laptops directly for well below list price, as long as you bought into a long term data plan. The whole idea seemed a bit strange, as mobile operators have long ranted long and hard about how much they hate, hate, hate subsidies, and how they wish they could do away with them. So, why add them to laptops?

However, the idea has now traveled over to the US as well, in a deal between Acer, Radio Shack and AT&T allowing people to buy an Acer netbook for just $100, so long as they agree to a 2 year $60/month contract for an AT&T mobile data plan. It's still a little confusing as to why the mobile operators are agreeing to this, following so many vehement arguments against mobile phone subsidies, but perhaps they're finally realizing that those subsidies aren't such a bad thing when they get people using their services. Still, how long will it be until buyers start complaining about early termination fees for laptops like they do for mobile phones?

Filed Under: contracts, netbooks, subsidies, wireless broadband
Companies: acer, at&t, radio shack

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  1. icon
    Steve R. (profile), 17 Dec 2008 @ 7:28am

    Re: Where did people learn math?

    Excellent point.
    Nevertheless, there is more to the story.

    First, the consumer should be able to drop the service whenever they wish without facing any prepayment penalty. If companies can change their terms of service, as they wish, so should the consumer. If the company loses money selling the laptops below cost, too bad. (note I did not use the word "subsidy").

    Next, these companies attempt to extend prepayment penalties even when you don't get a piece of real physical hardware that has value. For example Sprint said that we would have to sign-up for a new two year contract just to change our phone number! We said good-by to Sprint. Later, we were then informed through a class action lawsuit that Sprint made "errors" in their billing to us and that we were entitled to a $15 refund. But guess what - surprise, surprise - we would have to sign up for a new two year contract to get the refund. Of course we did not sign up. Clearly these "contracts" are more about locking the customer in and depriving the customer of their economic freedom than they are about "recovering" costs.

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