AT&T Next scam: you're paying twice and ETO is a better option

This article may contain personal views and opinion from the author.
AT&T Next scam: you're paying twice and ETO is a better option
I was actually just about to start writing an article on this very topic, when I saw in my news feed that T-Mobile exec Andrew Sherrard had essentially done my job for me (although he was far more succinct than I was likely to be on the subject.) Sherrard called out AT&T on its new "Next" frequent upgrade program as essentially being a scam.

Device cost

Sherrard talked to CNET earlier, and started out by calling AT&T Next a "poor imitation" of T-Mobile's JUMP plan. The crux of Sherrard's argument was exactly the point I had wanted to make, as he said:

The AT&T Next plan is set up to sound good, because it removes the up-front costs, and allows you to upgrade your device after 12 monthly payments. For example, with the normal route, you would pay $200 for a Samsung Galaxy S4, not be able to upgrade for 2 years, and at the end of that time you would own your Galaxy S4. With Next, there is no up-front cost, but you have to pay $32 per month for the device. If you pay for 20 months ($640), you can keep the device; or, if you pay at least 12 months ($384) you get to upgrade a year early, but you don't get to keep the device

Here's the problem: with either option, you're paying the same monthly service cost which already includes the phone subsidy. You remember subsidies, right? It's that thing that allows you to pay $200 for a device that would normally cost $600+ outright. T-Mobile removed subsidies from its monthly service charges when it first switched to Equipment Installment Programs (EIPs), but AT&T still has the subsidy built into the monthly service charge, which effectively means that with AT&T Next you're paying twice for a device that you don't even get to keep. You may not get to keep your T-Mobile JUMP device either, but at least the costs work out similar to a lease.


Of course, AT&T doesn't see it that way. AT&T sees it as a simple matter of giving the consumer more choice, with a rep telling CNET:

The AT&T rep also pointed to AT&T's larger LTE network as if that had something to do with the argument, although I'm struggling to see the connection. Sure, AT&T has better service in many areas, especially rural areas, than T-Mobile, but AT&T's LTE isn't always faster than even T-Mobile's HSPA+. But, that's not even the argument, because AT&T's service is already more expensive than T-Mobile's even when you remove the subsidy.

A single line on AT&T with unlimited voice and text with 4GB of data will cost you about $115 per month. Let's say that the subsidy is about $20 per month, that means just for the service alone, you should be paying $95 per month on AT&T. T-Mobile doesn't have a plan that exactly matches up, but for unlimited voice and text with 2GB of data, it would cost you $60 per month, or for unlimited data, it would be just $70 per month. So, even accounting for the subsidy, you're paying an extra $25+ per month just to have the "better" service (depending where you are) on AT&T

Conclusion: ETO may be better

In the end, while it is nice that AT&T has added the choice for users to upgrade sooner, as T-Mobile CEO John Legere said when he announced JUMP, there are a lot of steps that had to come before T-Mobile could do this properly, including removing subsidies, killing contracts, and moving to EIPs. He said at the time that even if other carriers tried to do what T-Mobile has done, it wouldn't work, because they hadn't done the proper building towards it.

Frankly, it looks like he was right, because here's the truth about AT&T's Next plan: signing up for it will cost you at least $384 plus your service costs in order to get your early upgrade after one year, and you don't get to keep your device. But, if you sign up for a normal plan, and pay $200 for a device, and pay your service charges for one year; at the end of that time, your early termination option fee would be $205 ($325 minus $10 for each month: 325-120=205). Even if you add in the activation fee of starting a new contract, you could terminate your agreement, and get to keep your device for just $56 dollars more than if you signed up for AT&T Next. Then you either have an extra device, or something you can sell on craigslist for a few hundred dollars.

So, where exactly is the deal again?

source: CNET



1. theoak

Posts: 324; Member since: Nov 16, 2011

SLAM! T-Mobile dollar for dollar you definitely get more bang for your buck. However, when you are outside you get screaming LTE ... move inside ... and you are on Edge :(

4. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

And this, T-Mobile does nation wide. They offer great prices, because they are in last place, and have no choice.

9. TreyTreyTaylor

Posts: 728; Member since: Dec 21, 2010

Last place? No that's all Sprint. And T-Mobile is rapidly improving it's network all over the US. They could definitely speed it the hell up. But they're doing just fine with me.

10. nexusalltheway

Posts: 69; Member since: Nov 28, 2012

Sprint is at 3rd after Verizon and ATT!

14. k1ng617

Posts: 270; Member since: Oct 13, 2009

Maybe in size now, but really if given the chance which carrier would you pick? I don't know ANYONE on Sprint unless it's their free phone from work.

18. Shatter

Posts: 2036; Member since: May 29, 2013

Only person I know on Sprint thought their unlimited was a good deal and got locked in for 2 years.


Posts: 4851; Member since: Apr 13, 2012

Here in the UK, i'm paying £36 for 16Gb 4G unlimited calls, text on a 30 day rolling contract. ®

36. Altair

Posts: 367; Member since: Feb 02, 2012

At scandinavia, its 2M unlimited data. 4,95e/month.

45. kanagadeepan

Posts: 1259; Member since: Jan 24, 2012

Here in India, I am paying Rs1599/- pm (roughly 27US$) for 10000 minutes, unlimited text, 8GB HSPA+ data from Airtel (number 1 and hence costliest in India) --NO CONTRACT-- Same by other operators as below:- Rs1499/- in Reliance (number 2 cdma) == 25.5$ Rs1299/- in TataDocomo (New operator) == 22$

2. InspectorGadget80 unregistered

No thanks. I'm so glad I left the EVIL GREEDY COMPANY and went pre paid and purchase my phone UNLOCKED.

5. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

@Inspector That is a great alternative. However, its only going to last as long as the carriers allow it. You only have two choices for unlocked devices, either AT&T and T-Mobile, everyone else (MVNO) is just a branch from one of the trees. Example, AT&T became tired of Walmart making money, so they pulled out of STraightTalk and created their own MVNO, AIO. So regardless how far you think you're going to get away, at the end they will get you. e.g. compare Red Pocket vs. Go phone, AT&T made sure Red couldn't provide LTE for the same price and amount of data.

6. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

If you are stuck with AT&T, going pre-paid and buying your own device would seem to be the best option.

19. Shatter

Posts: 2036; Member since: May 29, 2013

Nexus 4 is $350, more modern phone is the oppo find 5 with snapdragon 600 for $500. Both are cheaper than the current flagships, the nexus 4 is the best bang/buck. (Phones that can't get 4g do not count in my book so that covers 99% of chinese phones being kicked out.)

43. grapeseed87

Posts: 123; Member since: Mar 13, 2013

I totally do the same. Get deals via Ebay/Amazon for unlocked phones and since I bought the device, I can sell them back on ebay and have kept rotating devices like that. Since Nov of last year I have changed 3 phones (different flavors of Winpho 7.5/7.8 and now 8) all for a total of $200 plus shipping! Excellent devices, near mint condition.:)

3. kevv2288 unregistered

This is so true I literally having been doing this for years every year for like the past 3 years I would cancel m6 service and pay around $200 to cancel and then sell my old phone on ebay for around the same price $200 and then just start service up with any carrier and pay the new customer contract price its the best way to do it if u want a new phone every year lol

16. k1ng617

Posts: 270; Member since: Oct 13, 2009

I've done the same since my Droid 1 on Pageplus cellular 3 years ago. But, surprise surprise after my Excel session the value for dollar worked out better last year on a Note 2 for 100 down on TMob's value plan and I couldn't be happier.

17. xpr3ss10n

Posts: 58; Member since: Dec 15, 2011

Im not sure how that circumvents the system. In the end you still are paying a subsidy, even after you sell your phone to cancel the termination costs. Because then you are still with only 1 phone

23. kevv2288 unregistered

It doesn't but its still alot cheaper then at&ts new next plan im paying 95 a month now. If I cancel after a year pay 200 for that and sell my phone for 200 they cancel each other out and then my new phone would cost 200 plus a 36 dollar activation fee. So I pay 236 every year for a new phone with this new stupid plan it would be a extra 32 a month times that by 12 months thst 384 dollars vs 236 and u have to turn the phone back in to upgrade after a year so im saving around 150 bucks this way. Screw at&ts neew plan tmobiles still is the same way but ay least they lowered their plan prices

7. SavageLucy42

Posts: 211; Member since: Mar 24, 2011

I decided several months ago aleady, but this pretty much makes up my mind. My family is going prepaid as our contracts end. We'll be buying our phones outright from here on.

8. NorCalNokia

Posts: 9; Member since: Jun 23, 2013

I'd like the author to address the issue of anyone buying there phone outright on AT+T not getting any break from their bill as it stands now,so technically they've been double charged this whole time,do you hear anyone complaining about that?

11. papss unregistered

Yeah I wouldn't jump on this deal, I'll just keep my normal plan. I rarely ever go into edge, always in LTE or "4g".. Tmob just doesn't have the coverage that I need. Heck I got an astounding 33.54 Mbps down and 12.53 up in my area on AT&T.. Tmob who? Yeah no thanks, Ill pay more for those speeds. If tmob had better service I would jump but not how it is currently.

42. Doakie

Posts: 2478; Member since: May 06, 2009

Hmm. On my T-Mobile Galaxy Note 2 I just ran Speedtest and it did 52ms, 36746 Kbps down, 21683 Kbps up. So I would say your speed is average. I've seen those speeds on Verizon, AT&T and T-Mobiles LTE networks. Right now it's only Sprint that I've seen have abysmal LTE speeds. The best I've seen my Sprint HTC One ever pull was 54 ms, 21298 Kbps up, 11466 Kbps down. But Sprints LTE on a normal day it's usually around 5000 Kbps down 3000 Kbps up, if you can find their LTE network.

47. papss unregistered

Not in my city/ state... On tmob I'd be lucky to even get service due to their lack of coverage.. AT&T rapes tmob in overall coverage.. Again if they put some money into coverage they might get a new customer but no phone in the world would get me with the service they provide in my area

12. HeWhoDoesNothing

Posts: 158; Member since: Jul 15, 2013

What greedy bastards.

13. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

But, but, the carriers maintain that our monthly service costs don't include the cost to subsidize a phone, and that they eat the cost of the phone, even if you pay the full retail cost! No joke, that was the BS a Verizon rep tried to spoon feed me. But this article makes me think Verizon might, just maybe, be lying to their customers! What next?!? Are they gonna tell me the government lies to us too? NOOOOOOOOO!!!!!!!!


Posts: 2315; Member since: Jul 30, 2011

That rep should be fired, Verizon is the only carrier that doesn't d¡¢k screw customers with regard to subsidy vs full retail vs 2-year contract. If you sign a new 2-year contract with Verizon or "Upgrade" and extend your contract, you get a SUBSIDIZED device; if you choose to pay "Full Retail" or "Upgrade" at Full Retail (as in my case because I'll do everything in sovereign power to keep my Unlimited Data) your contract term is not affected and, once out of contract, you can continue month-to-month and, more importantly, you still have a subsidy available to you if you soever choose to use it!! Sure, for all those subscribers coming late to Big Red's party it can be expensive but, for me, it's dirt cheap; cheaper than T-Mobile-less Prepaid and definitely cheaper than AT&Tragic's nonexistent service. AT&T should be shot!!

24. roldefol

Posts: 4744; Member since: Jan 28, 2011

"once out of contract, you can continue month-to-month and, more importantly, you still have a subsidy available to you if you soever choose to use it!" But you're still paying the monthly subsidy whether you upgrade or not! This is why I try to convince people to upgrade as soon as they can get the subsidized price (used to be 20 months, but will be 24 starting this year.) Ok great, you're out of contract, but you don't save anything by holding out. And let's be honest, how many Verizon customers are looking to switch carriers? The contract to me is nothing but a waiting period before I can upgrade. And as I see it, if you don't upgrade, you're overpaying.

29. snowgator

Posts: 3621; Member since: Jan 19, 2011

Excellent point, and one I make in my area a ton. I may be repeating myself here, but in my area we have AT&T and Verizon and really that is it. Once you hit the end of the 2 year contract, you do not get a discount. It is free money for them. Unless you are waiting on a specific device release or moving carriers, just upgrade and make them give you a new toy.

37. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

I'm in the same boat as you carrier wise. The only reason we're looking at paying retail on phones isn't because of the unlimited data, although it is a plus. The reason is we got on a promotion a few years ago that basically gives us a $20 discount per line if we keep data on all the lines. If we were to go to Verizon's Share Everything plan, not only would we lose unlimited data, but our bill would increase at least $100 a month. Once Verizon finds a way to kick us out of that promo, THAT'S when we start shopping around. I'd love to have T-Mobile here, but all we have of them is roaming (I'm guessing through AT&T). Basically Verizon and AT&T are trying to have their cake and eat it too. They'd love for everyone to pay full price for their phones while keeping the monthly rates the same as if we were subsidized. It'd be as if we bought 2 phones but only took ownership of one every two years, that's an extra $20-30 a month extra for them.

32. nnjerzy

Posts: 126; Member since: Jun 19, 2013

Verizon is just as atrocious

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