By Frank Spinillo
It looks like the US mobile provider market is getting more interesting. First, it was T-Mobile with their UnCarrier program, followed by JUMP!, then Verizon got on board with a new device payment plan. Now, AT&T is joining the party with Next. The great news is that you can get the latest and greatest phones without forking over $600 upfront, but the added monthly cost might be tough to swallow for more the budget-conscious consumer.
We mentioned T-Mobile’s JUMP! plan previously and here is a quick refresher: if you choose to enter JUMP!, it will cost $10 per month on top of your other monthly fees — including service and device payments. What this offers you is the ability to upgrade your phone at any point, at no additional cost, with your device payments nullified, after you have been in the program for six months. The only requirements/restrictions from T-Mobile are that you trade in your current phone, and you can only do it twice a year. Still, for $30 extra a month ($10 for JUMP! and $20 for the device), you can get a shiny new phone every six months and still have a monthly plan cheaper than Verizon or AT&T; T-Mobile’s cheapest smartphone plan is $50/month before JUMP! and device payments.
Verizon’s current plan doesn’t have a cute name; it’s just their “Device Payment Plan“. Under this plan, current customers can upgrade their phone at full retail, and pay it off over 12 months with an additional $2 per month finance charge. Once the device is paid off, which you can do early, the $2 finance charge will go away with the monthly device installments. Verizon’s stipulations with this plan are that the device must be over $349 retail, and you can only do it twice a year, up to $1000 total.
Recently, though, rumors are surfacing that Verizon is expanding this program further and will be calling it “Edge”. Under this plan, all the current rules under the “Device Payment Plan” remain but once the device is 50% paid off you will be able to upgrade to a new phone at no additional cost or new contract. Since this is still a rumor, details aren’t completely known beyond that.
AT&T is now ready to challenge T-Mobile and Verizon with their “Next” plan. Under Next, AT&T customers can upgrade their device at any time with no down payment required (something T-Mobile requires). After that new device has been paid off for 12 months, you can trade in the device and upgrade to a newer device if you’d like, or keep the device until the payments are complete (20 additional months). AT&T will also be letting their customers pay off the device early. Like Verizon, the cost of the monthly installments will vary depending on the device. AT&T explains this further in their press release, saying, “The interest-free monthly device installments range from $15 to $50, depending on the device selected. For example, a customer purchasing a Samsung Galaxy S 4 would have no down payment and pay $32 per month, in addition to the monthly wireless service plan they choose.”
AT&T and Verizon both offer the flexibility of not requiring a down payment at purchase, but this of course means that your monthly payments will be higher. By requiring a down payment at purchase, T-Mobile helps make the monthly cost more transparent since they will show you the cost right there on the page. What isn’t clear is if AT&T and Verizon will allow you to pay the upfront cost of the device; if they do that may balance out the monthly cost difference more. After looking at all three charts, it’s clear that T-Mobile is the most affordable option when looking at plans over 12 months. T-Mobile comes in roughly $200 cheaper than AT&T and a whopping $500 less than Verizon. One thing to remember though — after 12 months you own the phone with Verizon, whereas T-Mobile and AT&T will require you to trade-in the device if you decide to upgrade. The benefit of this is that you are able to keep the device and sell it privately, allowing you to use that money to help pay off the new device.
Regardless of which carrier you’re on, there will be an added monthly cost for the device until you pay it off. While this may cause you to hold off from rushing out and getting a new device, keep in mind one big benefit of this is that it now makes it easier to get a replacement device in the event you have a lemon for a phone, break your phone, dunk it in water, or flat out lose it. Rather than pay the full retail up front, all three providers are giving you greater flexibility in getting your new device. Think of it as a 12–24 month interest-free loan.
Either way, the competition with US carriers is definitely heating up and it can only mean good things for customers. Even though the deals may initially seem expensive, the flexibility in upgrading without having to fight for early upgrades can make your day easier in the event of needing a new device quickly.