I think it stems from incompatible networks (GSM vs CMDA).
Since you can't take an out-of-contract phone anywhere else (with some exceptions), signing a new contract for a free or reduced-priced phone is your best option. Other companies can't use reduced rates as an incentive to bring in newly-out-of-contract customers with a perfectly working phone.
It's created a consumer mentality where getting your phone from the carrier is just the way it's done and signing a contract is the best value.
> It’s just that they presumably also overcharge you if you bring your own phone.
Sure, you can look at it that way but the average consumer here has accepted that you get your phone from the carrier so the idea of being overcharged doesn't even cross their mind. They look at it as getting something in return for signing a contract and making a commitment.
I think it stems from incompatible networks (GSM vs CMDA).
Since you can't take an out-of-contract phone anywhere else (with some exceptions), signing a new contract for a free or reduced-priced phone is your best option. Other companies can't use reduced rates as an incentive to bring in newly-out-of-contract customers with a perfectly working phone.
It's created a consumer mentality where getting your phone from the carrier is just the way it's done and signing a contract is the best value.
> It’s just that they presumably also overcharge you if you bring your own phone.
Sure, you can look at it that way but the average consumer here has accepted that you get your phone from the carrier so the idea of being overcharged doesn't even cross their mind. They look at it as getting something in return for signing a contract and making a commitment.