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  1. Thread Author  Thread Author    #1  
    Marbash's Avatar

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    Default U.S. Network phone politics. - Help me understand the system..?

    I've been curious for a while about the mobile networks "system" in the US. Here in Norway all the networks are selling the same phone, but usally with a branded version of the OS (so you have to wait for the network to get the updates from Samsung etc. and stuff alot of crap in there before their costumers can update their phone. But as I've listened to the podcast for a while i hear these terms: "Verizon SGIII", "AT&T One X" etc. How can the networks be so powerful that they can brand a phone with their own network logo, plus changing some of the features on the phone? How has this system been brought up to force costumers to a specific network if they want a phone with some special features?

    - I just read through my question, and there are some crooked language, but WTH, I'll just post it anyway. Maybe someone will be able to help me understand anyway. Keep in mind that I'm Norwegian, so well.. Meh..

    I'll be thankful for your reply.
  2. #2  

    Default Re: U.S. Network phone politics. - Help me understand the system..?

    The carriers here have to buy the phone from the manufacturer so the manufacturer has to abide by what the carrier specifies. They can strong arm HTC or Samsung into branding there phones a specific way or they won't purchase them is just the American way. ..There's really only one manufacturer that can do what they want and that is Apple. Samsung is getting close but as the Verizon note 2 shows. .. isn't quite there yet. So with the carpets being the middle man they get to decide what goes in and on the phone

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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    Also, each carrier has their own network here and built their own infrastructure (towers, etc). So a Verizon SG3 won't work on AT&T's network. Likewise an AT&T SG3 won't work on Verizon's network. And iPhone is the same way. I don't know all the ins and outs of the technology, but we have CDMA networks and GSM networks, and the tech is incompatible (Someone can correct me if I'm wrong, but I don't think you can talk and use the internet at the same time on AT&T's network, but you can on Verizon).

    There is also the issue that carriers have control over the software. So my Verizon SGIII came pre-loaded with some Verizon apps (most useless, but it does have an account management thing so I can check my data usage).

    Likewise, carriers can control when updates appear. So just because Android rolls out a new version, doesn't mean it gets pushed to my phone. Likewise, just because Samsung rolls out an update, doesn't mean it gets pushed to my phone. Basically, Samsung submits their updates to Verizon, AT&T, Sprint, etc. Then once the carrier tests it on their network and they approve it, they push it down to their subscribers. So when you see "an update is pushing down to AT&T GS3" that just means AT&T approved the update so only those subscribers are getting the update. Verizon is notoriously slow at updating their phones.

    Hope that helps.
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    People in the U.S. have been used to getting cell phones very cheaply. The phones are cheap because the carriers (operators) subsidize the price of the phone and their customers purchase the phones from the carriers at the subsidized price in exchange for signing a two-year contract.

    OEMs (Original Equipment Manufacturers) such as HTC, Samsung, etc. don't sell their products directly to consumers. They sell to the carriers. The carriers buy their phones in bulk. With large orders and huge sums of money at stake, the U.S. carriers have a lot of power over the OEMs. They exercise that power by demanding customizations to differentiate their version of the phone from that of their rival carriers.

    Since U.S. customers have been spoiled by subsidies, they (for the most part) won't pay the $600-700 for an unsubsidized/contract-free phone. So OEMs are forced to continue selling to (and catering to) the carriers, if they want to sell their phones at a profit.

    To avoid monopolies, the U.S. has enacted laws that require the major four carriers to license and share their spectrum with smaller competitors called MVNOs (Mobile Virtual Network Operators). These MVNOs lease spectrum from the larger carriers at wholesale prices and sell service to consumers at a lower price. They can do this because they don't have to pay for the upkeep of the infrastructure (cell towers, relay stations, etc.) This is how companies like StraightTalk and Simple Mobile work.

    Google has been trying to buck this trend in the U.S. by offering the Nexus (at cost) in the Google Play store. For the most part, U.S. consumers are still not aware of alternatives like the Nexus, because Google doesn't advertise to the extent that OEMs (Apple in particular) and carriers do. Apple's mind share in the U.S. is very high and their products are in high enough demand that they can strong-arm the carriers into selling the iPhone and iPad as is (no modifications).

    Low-cost MVNOs and prepaid carriers have had an undesirable stigma associated with them in the past. Many people still associate them with catering to people with poor or no credit, or assume they have poor coverage, or a poor selection of phones. This reputation is not undeserved because it used to be true. However, now that MVNOs are letting people bring their own devices (BYOD), the quality of the device you can use on a low-cost carrier has gone up. And coverage is pretty equal because of the spectrum leasing.

    This is also increasing the demand for unsubsidized phones in the U.S., which will eventually shift the power away from the carriers and allow the OEMs to cater to the consumer (as they should) instead of the carriers. Consumers just need to get used to the idea of paying the true cost of a phone up front, instead of over time in an expensive contract.

    The major carriers don't want to be relegated to being "dumb pipes" like most of the internet service providers (ISPs), so they have been trying to increase lock-in by providing extra services that they think will attract customers. Unfortunately, they also charge extra for those services...many of which can be had for free with a typical (unlocked/unmodified) smartphone. That's another reason that carriers demand customization of the phones and add carrier bloatware. Again, the Nexus bucks this trend.

    Hope that helps you to understand the U.S. cellphone market a bit better.
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    Quote Originally Posted by EvilMonkey View Post
    Also, each carrier has their own network here and built their own infrastructure (towers, etc). So a Verizon SG3 won't work on AT&T's network. Likewise an AT&T SG3 won't work on Verizon's network. And iPhone is the same way. I don't know all the ins and outs of the technology, but we have CDMA networks and GSM networks, and the tech is incompatible (Someone can correct me if I'm wrong, but I don't think you can talk and use the internet at the same time on AT&T's network, but you can on Verizon).

    There is also the issue that carriers have control over the software. So my Verizon SGIII came pre-loaded with some Verizon apps (most useless, but it does have an account management thing so I can check my data usage).

    Likewise, carriers can control when updates appear. So just because Android rolls out a new version, doesn't mean it gets pushed to my phone. Likewise, just because Samsung rolls out an update, doesn't mean it gets pushed to my phone. Basically, Samsung submits their updates to Verizon, AT&T, Sprint, etc. Then once the carrier tests it on their network and they approve it, they push it down to their subscribers. So when you see "an update is pushing down to AT&T GS3" that just means AT&T approved the update so only those subscribers are getting the update. Verizon is notoriously slow at updating their phones.

    Hope that helps.
    Actually, you can. AT&T has always been able to talk and do data at the same time. Verizon actually couldn't until they got LTE. In fact, AT&T had an ad campaign based on the fact that they could "talk and surf" at the same time, while Verizon and Sprint couldn't.
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  6. Thread Author  Thread Author    #6  
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    Wow. Just wow.. Thank you all for the overwhelming answers. This helped me understand the system alot better than I did before. There are subsidised phones here in Norway to sold by the carriers, but I do not believe that they have any influence on the specifications on a phone wether they want to or not. For exapmle I bought my SG3 with a Tele 2 12 month subscription, and then I got the phone for $100 and paying an extra 50$ every month on my subscription for the phone. I believe a carrier here tried to come out with their own phone a while back some Huawei model branded with their own carrier name, and it flopped haaard.
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    Quote Originally Posted by Marbash View Post
    Wow. Just wow.. Thank you all for the overwhelming answers. This helped me understand the system alot better than I did before. There are subsidised phones here in Norway to sold by the carriers, but I do not believe that they have any influence on the specifications on a phone wether they want to or not. For exapmle I bought my SG3 with a Tele 2 12 month subscription, and then I got the phone for $100 and paying an extra 50$ every month on my subscription for the phone. I believe a carrier here tried to come out with their own phone a while back some Huawei model branded with their own carrier name, and it flopped haaard.
    T-Mobile, here in the U.S. has similar deals where you purchase a phone from them and pay on it over time, along with your contract (subscription). In your case, it looks like your carrier is charging you $700 for the phone. That seems a little high to me. Is that in U.S. dollars?

    As for the carrier coming out with their own phone, the carriers here do it all the time, but it's just a branding thing. For example, Sprint had HTC give them an upgraded version of the HTC One X. Sprint had them brand it as the "EVO 4G LTE". They gave it different styling, a removable battery, and microSD storage. But internally it is just a One X.

    Of course the typical customer walking into the Sprint store won't know that an EVO 4G LTE is just an HTC One X.... not that the One X is a bad phone. It's a very good phone. But it shows how much influence carriers have with brand recognition in the U.S.

    So far, only Apple, and Samsung have managed to deploy a single model of phone across all the major carriers, while maintaining branding and a single design. Apple does it with their iPhone and Samsung did it with their Galaxy S3. Otherwise, phones from other OEMs get rebranded by the carriers and passed off as their own, even though the same phone might exist on another carrier.
    --Inspector Gadget

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  8. Thread Author  Thread Author    #8  
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    In NOK (my national currency) i paid 600 NOK for the phone in the store, then paying 200 NOK extra on my normal subscription because I got the phone for 600 NOK, when it's ustally 5000 NOK when you buy in unlocked and without a carrier.

    - - - Updated - - -

    Quote Originally Posted by Insp_Gadget View Post
    T-Mobile, here in the U.S. has similar deals where you purchase a phone from them and pay on it over time, along with your contract (subscription). In your case, it looks like your carrier is charging you $700 for the phone. That seems a little high to me. Is that in U.S. dollars?

    As for the carrier coming out with their own phone, the carriers here do it all the time, but it's just a branding thing. For example, Sprint had HTC give them an upgraded version of the HTC One X. Sprint had them brand it as the "EVO 4G LTE". They gave it different styling, a removable battery, and microSD storage. But internally it is just a One X.

    Of course the typical customer walking into the Sprint store won't know that an EVO 4G LTE is just an HTC One X.... not that the One X is a bad phone. It's a very good phone. But it shows how much influence carriers have with brand recognition in the U.S.

    So far, only Apple, and Samsung have managed to deploy a single model of phone across all the major carriers, while maintaining branding and a single design. Apple does it with their iPhone and Samsung did it with their Galaxy S3. Otherwise, phones from other OEMs get rebranded by the carriers and passed off as their own, even though the same phone might exist on another carrier.
    In NOK (my national currency) i paid 600 NOK for the phone in the store, then paying 200 NOK extra on my normal subscription because I got the phone for 600 NOK, when it's ustally 5000 NOK when you buy in unlocked and without a carrier.
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    Default Re: U.S. Network phone politics. - Help me understand the system..?

    Quote Originally Posted by Marbash View Post
    In NOK (my national currency) i paid 600 NOK for the phone in the store, then paying 200 NOK extra on my normal subscription because I got the phone for 600 NOK, when it's ustally 5000 NOK when you buy in unlocked and without a carrier.
    I just did the conversion. 5000 NOK is $881USD. Now that I know you would have had to pay over $880USD for it in Norway, I can appreciate your buy. Verizon charges $600 (full retail). That's why I said $700 was a bit high. But I guess you do end up saving some cash, given the mark-up in Norway.
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