Why are contract customers charged a "connection fee?"

[Musiclover08]

I had a very interesting conversation with a friend of mine regarding connection fees that are charged for contract customers. I was wondering why do these fees exist? In theory, if a person is signing a 24 month contract with any network provider, they are effectively saying that for the duration they will be staying with x network. So why is it that a connection fee is needed but I can go and get a prepaid card and pay around 50 cents for it?

 

[isie]

I had a very interesting conversation with a friend of mine regarding connection fees that are charged for contract customers. I was wondering why do these fees exist? In theory, if a person is signing a 24 month contract with any network provider, they are effectively saying that for the duration they will be staying with x network. So why is it that a connection fee is needed but I can go and get a prepaid card and pay around 50 cents for it?

same can be said about the upgrade fees they charge when you renew your contract

 

[deweyzeph]

Because people who sign contracts in this day and age are complete and utter suckers. If you can't afford a phone there are better ways to finance it than to sign a 24-month contract. And with call rates for prepaid now almost the same as contract, I can't understand why people still sign a 24-month contract. I switched over to prepaid years ago and have never looked back.

 

[isie]

Because people who sign contracts in this day and age are complete and utter suckers. If you can't afford a phone there are better ways to finance it than to sign a 24-month contract. And with call rates for prepaid now almost the same as contract, I can't understand why people still sign a 24-month contract. I switched over to prepaid years ago and have never looked back.

unfortunatly my company will not reimburse me with out an invoice,
pick and pay slips for prepaid voucher they wont acept

 

[Avenue]

Because people who sign contracts in this day and age are complete and utter suckers. If you can't afford a phone there are better ways to finance it than to sign a 24-month contract. And with call rates for prepaid now almost the same as contract, I can't understand why people still sign a 24-month contract. I switched over to prepaid years ago and have never looked back.

this isn't entirely true. Some of the contracts still get you much better value for a phone and inclusive data than buying each on their own will. I will give you that there is no incentive to get a contract on cell c though as they don't subsidize the phone at all, even on a 24 month contract and you paying the same call rates.

 

[Gadget Man]

I would assume it is an admin charge for them having to vet your credit rating, load you on their billing system etc. If all of that takes 30 mins, then roughly that the connection charge.

For prepaid there is no vetting, no billing etc. Hence the difference.

Do I agree that one should pay the connection charge ... yes and no. If it were in the contract, then existing customers just renewing would have to pay it over again when in fact they don't need to. So you can't add it like that.

I personally think that they should write it off ... just the cost of doing business, like bank charges.

 

[LCBXX]

Why? Because their Castles aren't going to be built without insane profits.

 

[Musiclover08]

There are benefits to contract agreements if you get the correct one that suits your needs. Also, it's more convenience to be honest. However, I don't agree with this connection charge, especially if you are already a contract customer.