AT&T wants $100 more for pre-paid extra handset if you're already a customer
In a single, perfectly-shaped act, AT&T proves that cell phone contracts are treated by operators simply as debts to collect. After the initial point of sale, you're just a delinquent lendee that owes them $2,000 or so over 24 months. From the Consumerist:
"Reader Dan writes in to tell us about an AT&T store that wouldn't sell him a phone because he was already an AT&T customer. ... it's strange that the store would be under impression that current customers have to pay more for a product. Isn't that a little counterintuitive?"
They've already got him under a contract. The purpose of pre-paid phones is to get people into contracts later on—a proposition that would explain the credit checks when you buy them. This is why existing customers always pay more for the goodies than do customers yet to be. They calculate that we won't choose the inconvenience of leaving, and that they can therefore squeeze us and drink all our brandy.
AT&T Customer? No Go Phone For You! [Consumerist]

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And suddenly, MeatLoaf's kid no longer loves him 'til the end of time - referencing a commercial for the AT&T Go Phone where MeatLoaf and actor portraying a son musically argue to the tune of "Paradise by the Dashboard Light".
cue the jokes about the backlights on AT&T Go-phones glowing like the metal on the edge of a knife.
Und der Haifisch, der hat Zaehne
Und die traegt er im Gesicht
Und ATT der hat ein Messer
doch das Messer, sieht mann nicht -
On the other end of the customer service spectrum: My entire family has Verizon, and my mom's phone is ancient but I kept forgetting to upgrade it for her. So the other day I go into a local corporate store to see what options I have. My mom's phone is not the main line (mine is), so it doesn't get their $100 2-year contract credit for a new phone, and it's way past warranty to get it replaced. I had to wait more than an hour, but this was just because of retarded ludites who ask the sale people hundreds of questions before they sign anything. When it was my turn, I came up and they told me all the problems I have with replacing the phone that I just mentioned, and that I'd just have to buy a new one for my mom. But when they found out I have a Verizon My Account... account (yeah dumb name I know), they said I could just go on the website and get a bunch of new phones for free through online deals, and then he apologized for my wait.
They might be pricey and their plans have less minutes, but I don't need all those minutes, and I'd gladly pay a little more for excellent service and customer privacy.
I don't understand how Americans get so badly shafted with phones, really I don't. A contract phone is not something that anyone pays money for in the UK, unless they are a slavering, must-have-it-now early adopter. Handsets are subsidised 100%, always have been.
As for pay-as-you go (that's the same as pre-pay, right?), I have seen brand new Motorola phones on sale for four pounds. Yes, four. Granted, it was described to me by the kid in the shop as 'the worst phone in the world', but it was four quid, and no-one expected me to put any credit on it, just pay for it.
It's always struck me as a little odd how difficult it is to get an off-contract phone. When we had to replace my wife's (stolen AT&T) phone, we wound up going to Best Buy to buy a GoPhone because the AT&T store makes you put $50 worth of minutes on it at the time of purchase. There is no such restriction, AFAIK, anywhere else; the AT&T guy even recommended that we do this. He was gracious enough to not charge us the ridiculous $20 SIM-replacement fee, though.
This was the second place we visited - the first AT&T store (apparently one orbit further from the corporate nucleus than the one we eventually wound up at) suggested a Byzantine series of added lines, shady discounts, and contract extensions was necessary to allow us to buy a phone _at all_.
When my wife and I were in London visiting family for a few weeks, we just wandered into Tesco, grabbed a cheapo Nokia and slapped 15UK of prepaid credit on it. It was hardly more difficult than buying a loaf of bread.
We tried a pre-paid phone here, and it took over an hour to get it up and running, it cost more, and the phone was a piece of fucking shit to boot.
Gilbert, we've got those super-cheap pay-as-you-go phones, too. I got my 1992-feature-set Motorola Go Phone for $5 from a dollar store. Counting the $10 credit it came with, AT&T paid me to use it.
Hell, I only use my cell to call my fiance, who's on an AT&T contract, and the Go Phones have free minutes on the network with a dollar-per-day-of-use fee. I spend maybe $12/month on cell service for about 1,500 minutes of use.
AT&Ts contracts are the worst, though. By far. Sprint was bad, but boyyyyy, AT&T has mastered the art of the shaft.