If he paid off the remainder of the contract, he paid the full price of the phone. Every carrier lets you unlock your phone at that point, AFAIK.
I bought my iPhone 3G in Italy (where I live) last year in october already unlocked (legally) and bundled with a rechargeable Vodafone sim card.
Edit: Furthermore, since the 3gs came out, you can also buy them at the Apple Stores.
2nd edit: here in Italy, subsidized phones are locked for the duration of the contract (usually two years). Once the contract is over you can unlock the phone. Or you can buy any phone unlocked for the full price.
This also apply to the iPhone.
Usually the difference in price of a contract with a subsidized phone and the same contract without any phone is almost exactly the difference between the full price of the phone and the subsidized price (split in the 24 months of the contract).
In France, there's a similar law that says that a carrier has to allow you to unlock your phone after some time (I believe three months).
In the US, you can't buy the iPhone unlocked (there was a hack on the Apple Store just at the beginning but that's it) and I don't think carriers have any obligation to do so. And that sucks.
Correct. Although it is legal to unlock your phone in the US (it is currently exempt from DMCA), carriers are not obligated to make it easy. And they usually don't.
However, I've heard that this is one of the things that Obama's new FCC is going to look into.
Are you sure about the DMCA exemption part? I know EFF was petitioning to make carrier unlocking exempt from DMCA. Why would they need to file for this if it was already exempt?
Perhaps it's different in the US. The terms in their mobile phone contracts do seem to be from another world (pay for reciving SMSs and calls? How is that even legal?).
One thing to remember though when considering that we pay for incoming calls in the US is that calling a landline or a cell phone from a landline cost the same. In France, (at least 5 years ago) there used to be a big difference and calling a cell phone was a lot more expensive... (see http://news.ycombinator.com/item?id=777512 for more details and why it's even more significant in the US)
Also, for a similar price, the plans have a lot more minutes. (again, if it hasn't changed dramatically in recent years)
Why do American consumers put up with that? (It's not like that anywhere else in the world, AFAIK.)
If you have a landline phone and it rings, you don't expect to be paying the bill... How did it happen that mobile phones got treated differently and nobody raised a stink about this rip-off?
You're absolutely correct. I used to work in the Mobile industry in the U.S. FWIW, here's the sordid history behind the craziness - it wasn't merely to rip the consumer off initially. It might help to imagine that all of this is taking place about 15 years ago:
Traditionally, toll charges (a surcharge) can be assessed to the calling party in the U.S. based mostly on area code (a.k.a. the NPA, the first three digits of the phone number), which designates a geographic region of the country. Thus, the caller knows how much toll he/she will be charged based on the phone number. I live in Maine, which is in the northeastern part of the U.S., with a 207 area code. If I call a number with a 310 area code (mobile, landline, it doesn't matter), I know that's in Los Angeles, and I can expect to be assessed toll charges based on the fact that it is so far away.
Let's say I'm a mobile subscriber living in Maine, thus my mobile number will start with Maine's area code (207). Let's say my mom, who also lives in Maine, gives me a call. I happen to be roaming in Los Angeles.
When mom calls my mobile number, that call is routed to my home switch (a.k.a. the HLR). which then forwards the call using a technique called "call delivery," to a temporary number (called a TLDN) that was assigned to me by the visiting switch (the VLR), when I arrived in L.A. My home switch knows my temporary number because it was transmitted to it when I arrived in L.A., so it's no biggie for it to just forward the call.
Now - who should pay the toll on the "leg" of the call between Maine and L.A.? My mom didn't know I was in California, so is it fair to hit her with toll charges because she had no idea she was calling all the way across the country. Naturally, it makes more sense to hit the receiving end with the toll charges.
In addition to toll, we used to have a myriad of mobile network providers in the U.S., and they had varying roaming agreements which charged the home carrier different airtime rates based on the nature of the agreement between the carriers. Again, when I was in L.A., it probably cost my home carrier in Maine a lot more because the L.A. carrier would charge the Maine carrier an arm and a leg to host my call. Who is responsible for this increase in charges? There was no technical mechanism to pass it on to my mom, and it probably wouldn't be fair to sock her with it anyway, so it was charged to me, the recipient.
Now, with the advent of national plans with thousands of minutes, and with carriers consolidated down to a few national networks, and very low network costs, a lot of this doesn't make sense anymore. And some carriers (I saw that someone mentioned U.S. Cellular) are coming to their wits and abandoning this tradition. But getting huge, stodgy networks to change their ways and drop a cash cow for the hell of it when they have a virtual monopoly won't happen overnight.
TL;DR - it's a holdover from the early days when roaming cost more, and it wasn't fair to hit the calling party with surprise charges. It probably shouldn't be that way any more.
Ah, that makes sense. I also pay when receiving a call when I'm in another country, which in Europa is about the same as being in another state in the U.S., distance and regulation-wise ;)
It still doesn't make sense. They should have charged your Mom for the local call and charged you for the leg between Maine and LA.
In India, in earlier days, each cellphone number will have a 'home area' generally conformed to the state you live in. If you are in the state where you bought the phone, you don't pay any incoming charges (voice/sms). Anyone else calling you will pay charges to connect to your number. If you are going out of your home state, you have to 'activate' roaming (it could be automatic if you wish to) and now you pay the 'roaming' charges from your home state to the current place where you are roaming.
Above is how it used to work when cell phones had just arrived. These days you pay a flat fee if you are calling another mobile from your mobile. Incoming call is free for the other party. Things do change if you call a landline phone from mobile (you pay higher rate because landline is mostly government owned in India).
I agree that it still doesn't make a lot of sense, especially today. But consider
1.) Even if the carrier only charged me for the second leg, it would still be a charge for an incoming call, which is what the OP was complaining about.
2.) This was, as you point out, back when cellular was just starting out, and roaming was a lot more common, even within your own theoretical "home area," because coverage was so poor, and because we had a decent amount of competition back in the early days - every area in the U.S. initially had two carriers (called an "A side" and "B side"), and they all used an analog technology called AMPS which was generally configured such that you roamed on each others' networks quite frequently.
3.) My last point about big stodgy carriers unwilling to give up a money maker still stands. :)
From talking to some Americans about it, they seem to think their system is actually better - mainly based on a misunderstanding of how it works in the rest of the world (their point was that if you have a French mobile phone, and you call another French mobile phone that unbeknown to you is roaming in Australia, you'd have to pay through the nose. Of course that's not how it works - you just pay for a local French connection and the roamer picks up the difference).
Not that the infrastructure has anything to do with the pricing policies, of course. It's still no excuse; here in Sweden we're currently upgrading the third generation of our cell phone infrastructure, and besides being able to re-use some of the older cell tower locations, it's been rebuilt from the bottom up at least once since the nineties. US operators should be able to the same thing, and it should be even easier for them with a bigger market - Sweden has only nine million citizens.
http://theappleblog.com/2009/08/20/apples-official-iphone-3g...