updated 05:29 am EDT, Tue July 16, 2013
Launch of T-Mobile Jump forcing other carriers to offer similar plans
The new T-Mobile Jump plan to allow for phone upgrades twice a year appears to have forced the hand of AT&T and Verizon into offering their own variants of the scheme, departing from the typical 24-month lifecycle. AT&T announced a new plan to provide new smartphones and tablets on a yearly basis, something it teased about last week, while Verizon is said to be working on its own plan.
AT&T Next, starting from July 26th, will let customers opt to get a mobile device without paying an initial downpayment, and instead paying an extra monthly charge. After 12 months, the customer can choose to trade in the phone or tablet for a new device under the same system, waiving both activation and upgrade fees at the same time. If a customer holds onto their phone for 20 months or pays the entire cost of the phone in full, they can keep the handset.
While this sounds like a good deal, it is probably only an attractive option for those really wanting to update their device every year or so. One example given by AT&T is the Samsung Galaxy S 4 at a cost of $32 per month on top of the monthly service plan. At the earliest possible time to upgrade, the customer will have paid out $384 on the device, far higher than the current $200 up-front cost for the subsidized device on a normal two-year contract. After 20 months, the longest period of payment, the customer will have paid out $640, the equivalent unsubsidized cost of the phone itself and a premium of $440 over the standard commitment payments.
Verizon's own rumored plan appears to be a mix of both T-Mobile and AT&T's plans. An image received by Droid-Life for VZ Edge shows it would allow customers to pay a monthly fee rather than paying an upfront cost, and will be given the option up upgrade anytime after half of the device cost has been paid off. It is said that the fee would be based on the full price of the device spread across a 12-month period, which would in theory allow upgrades from six months in. The supporting documentation suggests that Verizon will launch VZ Edge on August 25th.