The US “carrier wars” are heating up : Verizon, T-Mobile and AT&T this year have been battling it out with surprisingly generous trade-in discounts for new smartphones. Swap an old 4G Android or iPhone for a new 5G model and get up to US$800 knocked off the price. at&T contracts
Now, AT&T has taken the fight to its Equipment Instalment Plans (EIP) for postpaid customers.
What is an installment plan? at&t contracts
Instead of paying the full price up front when you buy a new smartphone, you can choose to pay on an installment plan. An installment plan takes the full price of your new device and spreads it across low monthly payments. Plus, you won’t pay any finance fees or interest.
Gone are the 30 (and 24) month deals. Replaced only with 36-month contracts. This is good news for churn, because a customer is locked in for longer. Bad news for upgrades, because a customer cannot replace their phone sooner.
Trade-ins accelerate replacement cycles… Longer contracts decelerate them…
AT&T Installment Plan with Next Up℠
Become early upgrade-eligible by turning in your current device for a new one after paying off 50% of the device cost. After you pay half of your 36 monthly device payments, plus $5 per month for the AT&T Next Up℠ option, you’ll be eligible turn in your device to upgrade early. (The $5 per month AT&T Next Up charge doesn’t apply toward the installment balance owed on your device.)
When can I upgrade my smartphone? at&t contracts
It depends on which installment plan you have.
AT&T Installment Plan
You’ll have to pay your full installment balance before you can upgrade. But your old device is yours to keep. Find out how to pay off your installment balance.
AT&T Installment Plan with Next Up
You can upgrade after you’ve paid 50% of the device retail price and trade it in, along with the $5 monthly Next Up charge.
AT&T Next® or AT&T Next Every Year®
You can upgrade early after paying off most of your installment plan. For AT&T Next Every Year, it’s 50%, and for AT&T Next, it’s 80%.
We can expect that Verizon, T-Mobile and others will follow AT&T’s lead. Three-year deals look set to become the norm.
But is it a wise thing to do? And will it last? There are going to be a lot of aging 5G phones on AT&T’s 5G network by 2024, which will cap the operator’s ability to lift future ARPU.