How do mobile phone operators make profit from contracts if you stick to monthly call limits?

Question

My pay as you go cost was same as contract if I don't make additional calls outside the maximim

Answer 1

the cell phone companies pay a lot of up front money to set up their network, but once its set up, its very cheap for them to operate.

when you contract with a phone company, you are promising them pure profit for 2 years. with all the millions of customers they have, its a thriving business.

Answer 2

While all these people are claiming "it costs nothing to let you use their towers" uh thats not exactly true. The wires from the tower to the call centers cost a lot, not to mention the cost of the tower (psh, somewhere around 1/4 mill usualy, thats $250,000)
They pay a couple hundred a month for T1 lines to carry the cell call to and from the cell sites ect. It DOES cost them a lot of money. BUT if they have enough Customers giving them $60 a month, then they can make a profit. Phones arn't a huge profit for them, BUT the company that has the coolest phones, get more customers, and once the customers have the phone, they are paying $$ every month. Hope I helped

Answer 3

You are paying the company money. It does not cost the mobile company almost any money to let you use there service so almost all the pay as you go money is profit in the first place!

Answer 4

Think about it, you're paying them, say, $60 per month. Do you really think it costs them that much to let you make calls off their towers? It costs them next to nothing!
That's how they make their money!