T-Mobile may have already gotten the, erm, Jump on its wireless rivals with its newest upgrade program, but AT&T today announced that it will be changing the way it manages device upgrades as well.
It’s called AT&T Next, and it’s a new program that lets you upgrade your phone or tablet once every year instead keeping you locked into a two-year service agreement. In AT&T’s words, it requires “no down payment, no activation fee, no upgrade fee, and no financing fees” either. And unlike Jump and its $10 per month setup, Next doesn’t add an additional monthly fee on top of its existing charges.
The tradeoff is that instead of buying a phone or tablet at a discounted, unsubsidized price like usual, AT&T Next has you pay monthly installment fees for up to 20 months to cover the cost of the device. It’s a little bit closer to how T-Mobile operates, though not exactly. AT&T says these fees will vary by device, will apply to any existing device it carries, and will range between $15 and $50 per month. They have no bearing on AT&T’s other monthly charges for messaging, data, and minutes.
While T-Mobile’s new plan lets users get up to two new phones per year after six months, Next allows for one phone or tablet upgrade after a year. After 12 payments, you can trade in your device—provided it still works—and start the monthly payment plan over again with a new phone or tablet. Alternatively, you can continue to use your device for the full 20 months and pay it off in full.
Like T-Mobile’s plan, the idea here is to be more accommodating to a smartphone market in which new devices are introduced at a rapid pace. Next should appeal to those who like to have the latest gadgets whenever they can, but it also gives AT&T the benefit of rolling you onto a continuous series of plans. It isn’t cheaper than AT&T’s normal contracts in the end–in fact, it can be more expensive–but it’ll give you the option to have new devices, which are often upgraded annually, faster than before.
Also like T-Mobile’s plan, AT&T Next is darn confusing to fully understand at a glance. To help clarify, let’s run through a test scenario and compare its value to the Jump program.
So, under AT&T Next, a Samsung Galaxy S4 can be had with no down payments for a monthly fee of $32. If you want to upgrade to the (presumed) Galaxy S5 in a year’s time, you have to pay at least 12 months’ worth of those payments. That’s $384 for a year–or 60% of the normal unsubsidized cost of $640, which you would reach after the full 20 months.
In any case, that $384 would go on top of a year’s worth of AT&T’s usual service plans. For our comparison’s sake, let’s say you want unlimited calling ($70/month), unlimited texting ($20/month), and 3 GB of LTE data ($30/month), since AT&T doesn’t offer unlimited data like Sprint or T-Mobile. Add those up for a year’s time, and you get $1440. That, combined with the $384 above, means that owning a Galaxy S4 for a year under AT&T Next costs $1824.
Now, let’s move on to using a Galaxy S4 for a year under T-Mobile’s Jump program. If you want to buy subsidized there, the S4 itself requires a down payment of $150, plus up to 24 monthly payments of $20. Over the course of year, that costs $390 total. Jump costs $10 per month on its own, which is good for $120 per year. So at this point, we’re up to $510.
But T-Mobile’s biggest advantage is in its service plans, which are much cheaper than AT&T’s. Compared to the near-unlimited AT&T plan we used above, you can get unlimited talk and text on T-Mobile for $50 per month, along with unlimited 4G data for another $20 per month. That means a year’s worth of unlimited talk, text and data on T-Mobile costs $840 on its own. Add that to the $510 above, and a year’s worth of Galaxy S4 usage costs $1350.
After doing the math, Jump looks to be the better deal. It’s cheaper, it offers more frequent upgrades, and it also throws in device insurance with its monthly cost. But it’s important to remember that AT&T still has a faster and more widespread 4G LTE network than T-Mobile’s growing infrastructure, so that higher cost isn’t all for naught. It’ll come down to consumer preference, and location, in the end.
Or you can just stick with a regular old contract on AT&T, Sprint or Verizon. Your call. Either way, the competition amongst the big four carriers appears to be heating up, if only by a little bit. For those who want it, AT&T Next will be available starting July 26. It’ll be an option for both new AT&T customers and existing ones who are eligible for an upgrade.