Why I don't rent, or buy subsidized devices
I recently made the decision to check out IP TV at home. While I don't watch much TV anymore, I just wanted to check it out and watch the occasional show (mostly football) on TV. That's what I'm paying nearly €20 per month for anyway in Germany (every household does, even if you don't watch TV at all).
Anyway, I had the option to rent a box from my Internet provider or buy the box directly. The receiver would set me back about €5 per month as a rental or €200 if I'd buy it new (used offers starting at about €120).
While renting surely has advantages, you may get a replacement quickly and upgrade to the next model when it comes out without extra costs, it is more expensive if you calculate the costs.
At €5 per month, I'd break even after 40 months if I'd buy a new receiver, or 24 months if I'd buy used. This looks like a long period but considering that devices are not changed that often it is more feasible economically and that is not taking into account the resell value of the receiver.
If you pay more for renting cable boxes or devices, you reach the break even earlier. American households pay $231 per year on average for renting cable boxes for instance. While US American cable companies sometimes seem to lock boxes so that customers cannot just buy a box directly, that is not the case in most parts of the world.
Another example. Instead of getting a new mobile phone contract and device subsidized at the same time, I made the decision to buy the smartphone directly instead.
If I'd accept the offer to get the subsidized phone, I'd pay more for it than buying it retail. That's again not taking into account that you get an unlocked phone right out of the box that you can use any way you please.
On top of all that, my provider rewarded me for not selecting a new phone by dropping €10 from the monthly payments I made for the mobile plan.
On a two year plan, buying directly saved me more than €300 without sacrificing anything.
Buying directly is cheaper and it puts you in full control of the device. You can modify it, for instance by installing new firmware without having to fear repercussions (if it is rented).
You can on top of that sell the device at any time, for instance to get a newer one and make some of the money back that you have spend buying it.
I bought the router as well instead of renting it from the provider. This allowed me to pick a better model which offered advanced functionality that the basic routers the Internet provider offered did not support.
There is one caveat and that is that you need to have the money in first place to buy the device right away.
Another issue that you may run into is if cable companies use special software in their cable boxes that may limit functionality when third-party boxes are used. This is often the case in the US where some functionality becomes unavailable.
As far as routers are concerned, Internet providers may sometimes refuse support if you are not using devices they are offering.
Now You: Do you buy or rent, and why?
When I activated my internet service (with Time Warner Cable), I had the option of renting on their modems. I of course knew this was a crappy deal, so I decided to buy my own. They provided a list of the routers that they offered, so I made sure to buy one of their approved devices. It’s worked like a charm so far. Of course, I know that they’ll still probably use the “but you’re not on our equipment” excuse if I ever need service, but at least I’ll have one more piece of ammunition to wage war with their customer service reps.
The thing is with cable internet, 1 year service fee is more than the cost of the modem. Quite personally, I would only rent a modem and never the Wireless Gateway.
As I’ve done level 2 tech support for companies like Time Warner and Comcast, having your own modem doesn’t amount to much in terms of service. Basic connections looked at and if the signal level is good, then it’s the modem (which they won’t do much besides unplug and replug), unless there is packet drops. So you’re basically good there :-)
My ISP provides me with a modem for free, so I don’t have to worry about rental fees but I would soon buy my own as the long-term costs will be more than short-term.
As for for devices, it depends on my financial situation: if I can afford it, I’ll upgrade out of my own pocket; If I can’t, then I’ll subsidize and then save up while doing so I can buy my own when the 2 year term (or so ) is up.
I totally agree Martin.
We bought all of our devices up front with cash and only pay $100 for 5-lines with cricket wireless (on AT&T). That’s the full bill amount for 5-lines with each line having unlimited talk/text and 2.5GB of data. Previously we were on the same plan with T-Mobile, but it was $100 + taxes, which came out to about $122/month and it was only 4-lines! So switching to cricket gave me an extra line and I still pay $22 less a month!
Meanwhile I try to explain how great of a deal this is to people, they just tell me how great their plan is with Verizon, AT&T, etc. and they pay like $40-60 PER DEVICE, per month. It’s crazy.
Yeah, here in the U.S, we get absolutely raped by monopolistic cable companies who grossly overcharge, because there is little to no competition. That’s why I ‘cut the cord’ in 2010, and never looked back. Now I just use Hulu and Netflix, and for anything else, I’ll just download.
I have a subsidized smart phone, but as an employee who gets 50% off my bill it was more economical for the wife and I to go subsidized. Though American cellular companies are moving away from subsidizing phones and offering a payment plan along with a pricing model that is more favorable to you buying it directly. Though I’d imagine they still keep the phones locked down until you finish your payments (I work in the enterprise wire line part of the carrier). I’m very dissatisfied with the slow updates on carrier devices and will be directly purchasing my phone going forward so I can control updates, though there is part of the phone the carriers control over you having to do with SDR functionality.
For home DSL I am forced to use my carrier’s box, but I use it only as the DSL modem and use my own access point as the built in wifi functionality was terrible. The box at least is provided as part of the service.
Ah, the good ol’ USA. I got a VHF/UHF set of rabbit ears for $10 from a discount store, & can watch (gridiron) college football from noon to almost midnight on Saturdays,usually with my choice of several games, & view 3 NFL games on Sunday, again, with alternates available most of the time. MNF is radio for me, as are half the Thursday night games…. Mostly all I watch otherwise are the Fox animated shows, & a couple British comedies on PBS (”As Time Goes By” is one of the best television shows ever).I get about 25 channels, inc. many old classics like ”The Twilight Zone” & ”Get Smart”. All for the low, low price of nothing.