What Nilay missed ranting about AT&T's and Verizon's scams.
Let me first say, I don't disagree with Nilay's conclusions regarding these two newly announced plans; they do appear to be spectacular scams - double dipping on the same phone, once with the built-in subsidy and again with AT&T's NEXT and Verizon's EDGE plans.
However, I for one am very happy to see these new plans. Why? Am I a sadistic arsehole, gleefully rejoicing at the pain and suffering wrought on the American consumer caused by these new loan-shark like plans? No. I'm happy to see these plans because for the first time we have some rationality in the phone market.
That is to say, the aspect that is very interesting to me is that both AT&T and Verizon have structured their plans such that if you buy a Galaxy S4, you pay significantly more per month than if you bought last year's Galaxy S3 or some other throwaway phone.
This is a key victory for the consumer! It doesn't make sense that the difference between the best phone on the market and the worst phone on the market is $200 for the consumer -- when in reality the difference is on the order of $600. You had a situation where subscribers who were perfectly happy with a flip phone were being vastly overcharged because the plans were designed for the consumers who were buying the S4s and the iPhone5s.
The new plans, if forced on everyone, will amount to a higher price - but a more rational price across the board.
But that's a great thing - in the long run; In the short run, its very painful. But in the long run, prices will have to come down; Sprint is getting stronger, T-Mobile too. If they execute their network deployment plans well, prices have to come down. The 'subsidy' portion of your monthly bill that is built into the current price will effectively disappear, replaced with the variable phone based charge.
TL;DR The equilibrium scenario will be reasonably priced plans, that vary in price based on the phone you choose. And that's a change I can get behind!