AT&T's Next to Shorten Wait for Device Upgrades

In an obvious response to T-Mobile US's newly launched JUMP plans, AT&T is launching a new service option that does away with device subsidies and shortens its customers' wait time for device upgrades from two years to one.

AT&T Next, as it will be called when it goes live on July 26, lets new or upgrade-eligible customers pay monthly installments for their smartphone or tablet with no down payment. After 12 payments, they can trade in the device for a new one or continue to pay it off until they outright own it after 20 months.

AT&T says the new plan is available for any device in its current portfolio with payments ranging from $15 to $50 depending on the retail value of the chosen device (the full retail cost divided by 20). A $650 iPhone 5, for example, would cost $32.50 per month versus the $200 it would cost up front on a traditional two-year contract.

In announcing AT&T Next, the carrier also slipped in that it now covers 328 markets with LTE, reaching 225 million people, having just added two new markets in Missouri and Texas. The carrier, which announced its intention to acquire Leap Wireless late Friday, says it will cover 90 percent of the U.S. with LTE before the end of the year and reach 300 million people by the end of 2014. (See AT&T to Acquire Leap Wireless for $1.19B.)

Why this matters
Next is clearly AT&T's response to T-Mobile and its "uncarrier" ways. T-Mobile was the first to get rid of device subsidies earlier this year and last week, began letting its customers upgrade every six months for an extra $10 per month.

AT&T's Next gets rid of the device subsidy, but it doesn't drop the price of service at all. Even so, it's just one of many plans the carrier now offers, so it may appeal to those consumers who don't like to wait for the latest and greatest handsets. AT&T's hope is that it keeps them from jumping ship by more frequently trading up their device with the operator.

When T-Mobile first dropped handset subsidies, many predicted other operators would soon follow suit. That has yet to happen in the U.S., but an LTE pricing war is clearly underway. Both Sprint Nextel Corp. and Verizon Wireless are still sticking to subsidies, but Sprint last week made an unlimited guarantee -- promising its customers they wouldn't lose their unlimited data as long as they stick with Sprint.

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— Sarah Reedy, Senior Editor, Light Reading

nuker 7/16/2013 | 9:11:11 PM
re: AT&T's Next to Shorten Wait for Device Upgrades If this takes off then there could be a larger used/refurb inventory. It may be good news even for users who hunt for deals.
milan03 7/16/2013 | 8:37:21 PM
re: AT&T's Next to Shorten Wait for Device Upgrades Verge article is on point. AT&T's next is basically more expensive plan than regular $199 two year plan. Their Monthly rate plans are already ridiculously high, and are not getting any lower with Next. It only gets higher as your monthly plan now gets to be even more inflated by monthly installments fees...

Carol Wilson 7/16/2013 | 6:47:29 PM
re: AT&T's Next to Shorten Wait for Device Upgrades I'm out of the target market for changing devices on a whim because of a new feature, so maybe I'm speaking for a subset of users when I say that not getting any kind of discount on a new phone totally changes the appeal for new devices. Paying $32 a month for a year or more is very different from paying $200 up front and if the service isn't discounted to account for the end of the subsidy, this looks like a raw deal.
Sarah Thomas 7/16/2013 | 5:49:16 PM
re: AT&T's Next to Shorten Wait for Device Upgrades The Verge had another take on AT&T Next...when you consider that the plans don't discount the service (which is already more expensive because it includes a "subsidy" fee), they are really a rip off. Pretty deceptive. http://www.theverge.com/2013/7...
Sarah Thomas 7/16/2013 | 5:21:05 PM
re: AT&T's Next to Shorten Wait for Device Upgrades To be fair, I got the invite to AT&T's "see what's next in wireless" on Tuesday, and T-Mobile announced JUMP on Wednesday. So, it's hard to say who came first on the upgrade cycle changes, but T-Mobile getting rid of subsidies definitely was the impetus for this move by AT&T.
Sarah Thomas 7/16/2013 | 5:20:08 PM
re: AT&T's Next to Shorten Wait for Device Upgrades So you mean essentially only doing BYOD to their networks? Maybe that's the next step they'll follow T-Mobile on. Exclusives are still so common here though, as Nokia explained last week. I wonder how much a BYOD environment would hurt their partnerships and deals with handset makers.
DanJonesLRMobile 7/16/2013 | 5:11:57 PM
re: AT&T's Next to Shorten Wait for Device Upgrades Well, it appears to suggest that T-Mobile CEO Legere was right and the big 2 are rattled by the T-Mobile JUMP plan doesn't it?

There's definitely a desire among a certain sector of my friends to upgrade whenever they want, not just every 2 years.
MordyK 7/16/2013 | 4:49:41 PM
re: AT&T's Next to Shorten Wait for Device Upgrades I don't get why they are still trying to be involved in the phone selection itself now that they are in effect becoming financing companies for mobile devices on their networks, akin to the way car manufacturers have leasing/financing arms. Why won't they simply open the market wide for brands and off brands of mobile devices and create a subsidy market? it will free up the market for devices and open up new ones for a new breed of connected devices.
Sarah Thomas 7/16/2013 | 4:44:11 PM
re: AT&T's Next to Shorten Wait for Device Upgrades Apparently Verizon may be the next to unveil a new upgrade plan. Both it and AT&T extended their upgrade cycle on subsidized devices to 24 months in the Spring, but looks like they're willing to experiment more with unsubsidized handsets.

DroidLife has the rumor story about Verizon's new plans, VZ Edge, expected to come out next month: http://www.droid-life.com/2013...
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