Re: Stupid clueless US customers
Gene, T-Mobile's plans are different: Service and handset are separated. The $20/month is the repayment for the phone. After 24 months, if you don't want to get a new phone, your bill goes down by $20 every month.
Other operators are nasty, however, in that they don't let you drop back to a SIM-only plan at end of contract. Instead they push another "free" phone on you and keep the high monthly charge in place.
T-Mobile's scheme is pretty much the way Finnish customers have always bought their phones: service plan, plus a low-interest loan on the handset, and this clear separation is common in other Nordic markets. The UK leans towards the US model of "flat monthly fee", but at least the pricepoints are more flexible, rather than being multiples of $50.
But the real reason for the horrible pricing is simple: The US mobile market is highly uncompetitive. Taken as a whole, there are apparently four major operators, but when you get to a regional level it's a patchwork of effective monopolies: there are large areas where only one operator provides full coverage, especially for people who need to travel outside of major metropolitan areas. The CDMA/GSM split exacerbates this, as you can't even roam on a competitor network to fill in the gaps (a strategy that has been used for rural service provision in several European countries). This limits customer mobility between providers, thus allowing the operators to charge more.