Those contract prices include a $450 subsidy by the carriers, who
are not in the business of giving money away. And they make sure
they recover that subsidy. In some cases, they end up charging you
hundreds of dollars more than you would lay out if you simply
bought it outright.
After you add that device to your shopping cart, you then have to
select a monthly plan and agree to pay the price of that plan for
And guess what? For the three carriers that dominate the U.S.
mobile market, the monthly prices for contract plans are
significantly higher than those you will pay if you buy the phone
outright or finance the full retail price.
The FTC ought to step in and force the carriers to clearly tell you the true price you’ll pay for your phone over the course of your two-year contract. And kudos to T-Mobile for being the only U.S. carrier with honest pricing.