No Contract Phone Plans Rolled Out by AT&T, Following T-Mobile Lead

Tuesday, 16 Jul 2013 06:17 PM

By Morgan Chilson

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AT&T has announced a new no-contract, early upgrade phone plan that competes with T-Mobile’s JUMP plan unveiled last week.

The AT&T Next program lets customers pay for their smartphones, tablets, and other devices on an installment plan over 20 months, CNET reported. It also allows an annual upgrade for a tablet or smartphone.

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The move comes shortly after T-Mobile announced its JUMP plan, that is very similar to the new AT&T Next – early upgrades and monthly installment payments on devices, CNET said.

PC Magazine questioned whether the two plans were “smoke and mirrors?” mentioning that, “Guess what? Wireless carriers can do math.”

The new plans may not be the best choice for everyone, the magazine reported, saying customers can end up paying for their phones twice. The mag looked at iPhones as an example.

On the new AT&T Next plan, a customer would pay $32.50 per month for the phone, plus the monthly service plan cost. A standard contract comes in at $199 upfront. After six months, PC Mag said, you’re paying more than $199 plus you’re also paying the subsidy that’s been added into the plans to replace phones.

T-Mobile did away with contracts, so that makes the math easier to figure out, PC Mag said. The company charges $649 to buy an iPhone on a standard plan or $145 upfront plus $31 every month, which lets you turn your phone in for a new one twice a year.

The Verge posted an article calling the new AT&T Next plan a “huge ripoff,” and commenters seemed to agree. But, as one said, they didn’t expect T-Mobile to be able to compete until the company could expand its network.

A Houston Chronicle blog post gave credit to T-Mobile for “shaking up” the wireless market by bringing in a plan model that’s used in Europe.

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Related stories:

TMobile Eliminating 2-Year Cell Phone Contract Requirement?

AT&T Said to Mull Deals With Telefonica as It Scours Europe

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