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You'll pay for that 'free' cell phone.(GOTCHA!)(Brief article)
Big cellular service providers offer "free" or deeply discounted phones, but you pay back those promised savings one way or another, representatives for the carriers admit. The most obvious way is through early-termination fees as high as $200, which kick in if you don't fulfill the typical one- or two-year contract.
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But there's a less obvious way you pay: The cost of the phone is built into your monthly fee. "We expect to recover the handset subsidies through service revenues," states Sprint Nextel's annual report to the Securities and Exchange Commission. That's why early-termination fees for Sprint and other carriers disappear at the end of the contract term--the discount has been repaid--and why they reappear when you upgrade to a ...
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