AT&T Launching "Next" Phone Upgrade Plan Starting July 26, Verizon to Announce "VZ Edge" Plan
July 16, 2013 8:04 AM
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Both are similar to T-Mobile's new "Jump!" plan in that they allow customers to upgrade their devices sooner
T-Mobile isn't the only U.S. carrier rolling out a new upgrade plan: AT&T just introduced its "Next" plan, and Verizon is expected to detail its "VZ Edge" upgrade option in the near future as well.
AT&T announced this week that it will offer a "Next" plan, which will allow customers to upgrade their devices more frequently. More specifically, the plan will let customers trade in their smartphones and tablets every 12 months on a post-paid basis -- meaning they pay a monthly fee on top of their regular AT&T plan based on a 20-month cycle.
For example, if a customer were to get a new smartphone or tablet, the retail cost of the device would be divided by 20. That number would then be added to the monthly bill on top of the traditional or family-share AT&T plan. In 12 months, the customer can upgrade to a new device and start the process over again.
The "Next" plan won't lay any extra fees on the customer other than the retail price divided by 20, but customers will be forced to pay the remaining months’ fees.
You can expect to see "Next" roll out on July 26.
This isn't AT&T's only new upgrade plan on the block, but some may think it's better than what the carrier introduced last month. In June, AT&T announced the
new 24-month upgrade policy
, which allows customers to upgrade their phones in 24 months instead of the previous 20-month period. It applies to any customer whose agreement expires in March 2014 or later.
Last week, T-Mobile launched its
new "Jump!" program
, which lets customers upgrade every six months for an extra $10 fee each month on top of their regular, monthly wireless charges. However, it differs from the "Next" plan in that it applies to only smartphones, not tablets. Also, customers have to pay the $10 monthly fee unlike AT&T, which doesn't require an activation fee or down-payment for using its plan, but does make customers pay the remaining months’ fees.
Verizon, the No. 1 carrier in the U.S., won't be left behind in the new round of upgrade plans. While Verizon hasn't announced it yet, it looks to be planning a big reveal of
the "VZ Edge" plan
, which reportedly allow customers to upgrade to new devices as soon as they pay off 50 percent of their current smartphone.
So what is Sprint doing as all the other major U.S. carriers roll out new upgrade options? There's no sign of something similar coming from the company, but it's keeping its edge by offering unlimited plans -- which no longer exist with Verizon and AT&T.
All Things D
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RE: Muddied Waters
7/16/2013 11:29:30 AM
I've made a small error. In the new "Next" plan, you may cancel service at any time, but you must pay the remaining balance on the phone. This is in lieu of the traditional early termination fee.
- Installment plan on phone, still bound by 24 month service contract; waived installation fees. (Edge/Next)
- Installment plan on phone; must pay remainder of phone if cancelling; waived installation fees. (Next)
Assuming a $660 phone (say, a Nokia 1020):
- Existing: Pay $300 up front, plus $36 activation fee, subject to $325 ETF. At month 12, may not upgrade in-plan; subject to $205 ETF (325-(12*10)). If leaving AT&T: $541 paid in addition to service costs. (Presumably, less recoupment if selling phone).
- Next: Pay $0 up front, $0 activation fee, plus $33/month. At month 12, may upgrade having paid $396. If leaving AT&T: pay balance for total of $660.
From this I figure: a) they've worked it so you can't get a cheaper phone by signing up and cancelling no matter what; b) if you're dying to upgrade at 12 months, you have to figure out if the up-front costs + ETF - selling your phone is more than the Next plan's cost (in my example, you'd need to net $145 out of a year-old used 1020 to break even); and c) if you expect to switch carriers frequently, or only upgrade every two years, Next is not a good deal. It only helps you if you do expect to want a new phone and you intend to stick with AT&T.
“So far we have not seen a single Android device that does not infringe on our patents." -- Microsoft General Counsel Brad Smith
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