AT&T ‘Next’ Devices Upgrade: Yesterday, AT&T launched a new device upgrade program called AT&T Next. However, uncertain response to T-Mobile’s ‘Jump’ plan, Next will enable customers, willing to pay a monthly fee, to trade in their device and upgrade to the latest one every 12 months.
Well, it sounds like a good deal. After all, the carrier’s current policy is that you only get a supportive equipment upgrade every 24 months. But after processing a few numbers, it’s quite clear that the Next plan is a big fraud for customers…
So that’s why the AT&T Next program works. As it is that customers will make monthly payments equivalent to 1/20 of their device’s full retail price for 12 months. Also, they get to trade it in for the latest device. They don’t get to keep it unless they make 20 payments.
Now, let’s come and do some math:
1/20th of the full retail price on a 16GB iPhone 5 is $32.50 and paying that dozen times comes out to $390. That means that AT&T is going to provide you $260 for your one-year-old handset when you trade it in, right? Wrong.
http://www.youtube.com/watch?feature=player_embedded&v=cC9zG1MgTLs
However, $32.50 you would pay a month is in addition to your rate plan that already factors in a device subsidy. However, Patel puts that number at about $20 per month for average handsets, which modifies things.
Let’s take $390 we said you would pay for a 16GB iPhone 5 after 12 months of $32.50 payments. However, add an extra $240 ($20 x 12). As it comes out to $630 which means not only did you end up practically paying full retail for the phone, but you don’t get to keep it.
But hey, make sure, you should keep it after 20 months of payments. But unfortunately, that’s even worse. However, 20 x $32.50 for the Next fee, added to 20 x $20 for the subsidy cost already in your rate plan that’s equals to $1050. So, you just paid $400 over the full retail price.
“There just isn’t a scenario in which paying for Next is quite better than just purchasing an unlocked phone at retail. However, AT&T is taking benefit of consumers trained to think the latest phones are a magical gift allow them by greedy, controlling wireless carriers”
Conclusion:
Well, I agree with Nilay. The simple way that the AT&T Next plan is if the carrier erased the subsidy cost built into its rate plans. Thus making the plans cheaper. But tell me what do you think the chances of that happening are?
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