AT&T’s new device upgrade program called Next has managed to enrage rival T-Mobile, which thinks the initiative is just plain “sneaky and underhanded.” The early upgrade program is indeed a bad deal for consumers so the nation’s second-largest telco has tweaked pricing earlier today, making a number of devices more affordable.
This includes Apple’s iPhone 5, which can be now had for $27 per month for the entry-level model with sixteen gigabytes of storage. That’s $5.50 per month cheaper compared to the previous $32.50 per month iPhone 5 pricing under AT&T’s Next.
Sticking it to Verizon, the new $27 per month tier is also a buck per year cheaper versus Verizon’s Edge plan…
MacRumors has put together a nice chart comparing old vs new pricing.
The new pricing doesn’t change the fact that AT&T’s Next initiative is basically unfair.
In addition to paying for your device through monthly installments, you also get to pay for the upfront handset subsidies built into AT&T’s monthly service charges because the carrier “forgot” to tweak service fees.
Assuming that $20 of AT&T’s monthly service fees go toward recouping the carrier’s handset subsidy, a customer looking to upgrade after 12 months would have paid $324 in device payments on a 16 GB iPhone 5 and $240 from monthly service fees, yielding total payments of $564 for the $650 device, although they also have to turn in the device to AT&T.
Does this math look right to you?
By comparison, Verizon’s Edge program has those looking to upgrade after 12 months paying $565- $325 in device payments and $240 in monthly service fees - plus the device trade-in.