
AT&T to Ditch Two Year Contracts for Smartphones - selimthegrim
http://www.engadget.com/2015/12/30/att-ditch-contracts-jan-8/
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bko
My only beef with AT&T Next program is that the naming is dishonest to suggest
that there are only [x] monthly payments for program AT&T Next [x]. [x] is the
months required before a trade in, not the amount of installments.

AT&T Next 24: Divided into 30 installments; trade in and upgrade after 24
installments.

AT&T Next 18: Divided into 24 installments; trade in and upgrade after 18
installments.

AT&T Next 12: Divided into 20 installments; trade in and upgrade after 12
installments.

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kenjackson
I agree, but I can't think of a much better name? Next 24/30 seems more
honest, but more confusing at the same time. Especially because now you have
Next 18/24 (the 24 overlaps in two plans).

That said, I'm on a Next plan and the sales people have been super clear about
this. So I haven't had the experience of them sneaking it in.

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smackfu
Yeah, it's not like they hide it on the sales page, which says:

AT&T Next℠ 18

$0 down with 24 monthly installments. Trade in at 18 months.

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acheron
I still have an old AT&T contract with unlimited data. I don't really use that
much data relatively speaking, so last time I was up for renewal I tried
several times to see if I could get a cheaper plan from AT&T, and no matter
what I did it was always more expensive than just keeping my current unlimited
data plan because they've raised prices on everything else.

So when this iteration of the contract is up, if my only options are going to
be something more expensive, and they're not going to subsidize my phone
anymore, then that rather lowers the chance that I'd stick with AT&T.

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sethd
From what I've seen, wireless carriers don't care too much about retaining
existing customers and focus mostly on acquiring new ones.

Probably a different story with larger business customers.

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jschmitz28
I'm running the AT&T plan for my family right now and the math worked out such
that we would pay almost the exact same amount whether we bought a new iPhone
up front or bought it subsidized with a 2 year contract (because of the
monthly price difference between Bring Your Own Phone and a subsidized phone).

So I'm not seeing how this is much different for the customer, except that
it's more straightforward to understand the pricing model (buy phone up front
vs. paying in monthly installments).

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georgehotelling
What's the difference on month 25 if you don't upgrade? That's always been
annoying to me about contract prices: your phone bill didn't go down when your
contract was up and presumably your phone was paid off.

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jschmitz28
This was the nasty part for me. I had to explicitly contact AT&T customer
service and ask them to change my account from a contract plan to a Bring Your
Own Phone plan once the contract expired in order to bring the bill down on
month 25.

I figured most customers wouldn't notice to take advantage of this which is
why I think a clearer separation between phone payments and cell service
payments is a good thing.

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jgallias
Yeah this pretty much guarantees that I'll just switch to the iPhone Upgrade
Program. I get my upgrade same-day, and my Apple Store always makes it right.

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UnoriginalGuy
Currently the iPhone Upgrade Program is more expensive than almost any
network's Next/Jump!/etc program, by at least $10/month.

The 16 GB 6S is $388.92/year on Apple's plan, $260.04/year on AT&T's Next, and
impossible to calculate on T-Mobile's JOD (since T-Mobile don't provide a
calculator and can adjust trade-in values on a whim).

If you have the money to spare, the Apple program is the most hassle free,
just also the most expensive.

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insaneirish
> If you have the money to spare, the Apple program is the most hassle free,
> just also the most expensive.

Next upgrade, I will either be buying outright or using the Apple plan. AT&T
Next was a disaster for me.

When you purchase an AT&T Next upgrade via Apple, an email is sent from Apple
with forms and instructions for returning your old phone. For one of my
phones, I received this documentation. For the other, it was nowhere to be
found. The link on Apple's site to resend the email didn't do anything.

First I talked to Apple. They said talk to AT&T. People at AT&T didn't even
know why I was trying to return my phone. Basically, they didn't even know
what AT&T Next is. I finally got someone at Apple who immediately said "don't
talk to AT&T; we'll take care of this." And he tried. Even though the email
comes from Apple, it hits a backend AT&T system. And it was AT&T's system that
was stuck. All said and done, it took me a month to get my form, just so I
could actually send the phone back.

And then one of my fears was realized. Not having received the phone in a
timely manner, AT&T charged my account for not sending it back. That took
another month to resolve.

I wasted hours and hours trying to fix this and it was one of the worst
consumer experiences of my life.

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FireBeyond
Having said that - that actually sounds more like an Apple issue.

I was able to trade my girlfriend's iPhone in on the Next plan at a Best Buy
Mobile store without any issue. All the documentation and return was handled
in store.

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dbg31415
They've already tricked everyone into dropping the better plan with free
upgrades ever 2 years in exchange for a hike in data service fees... best
marketing snowjob ever. Plus, with their "pay the phone off a month at a time"
crap almost everyone opts for they still effectively have contracts.

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mikeash
I got a nice upgrade in service and a discount in cost when I made that
switch. And I get to buy my phones outright so I don't have to worry about
convincing AT&T to unlock them. Seems like a total win to me. I've always been
dissatisfied with carriers selling phones on contract, and I'm glad to see
that this whole model is dying. With the Next plan you so criticize, people
still have the option of paying for their phone gradually, but now it's
genuinely a choice.

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fluxquanta
Are the fees for the phone and the service separate, such that, say, I can get
a new $600 phone with minimum advertised $25/month payments over two years,
but I could pay it off in 3 months at $200/month, and from then on out just
pay for service?

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Karunamon
I know Verizon lets you do this - you can pay off the phone by itself at any
time.

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fluxquanta
Looks like that's probably true for all of them now. I have Sprint and after
posting my question I looked up Sprint's "Easy Pay" option, which is exactly
this. For some reason I thought it was a rebranding of the current subsidized
model where your phone and service payments were locked together.

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mikeash
A phone company providing reasonable options and not screwing you over at
every opportunity is rather weird, and I didn't believe it at first either.

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Karunamon
Agreed - there's probably a business reason for it. Perhaps the fact that it's
now a bog-standard financing arrangement forces them to allow it to be paid
off separately?

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fluxquanta
Here's an idea: What if they studied customer behavior and found that when the
traditional 2-year contract is up people started shopping around with other
providers to see if they could get a better deal, and an unacceptable number
were then lost as customers? I'm betting this happened quite a bit, actually.

With the new system when the two years are up (assuming the phone wasn't paid
off before then) the customer automatically sees a nice little drop in their
bill, which may make them feel more positive about staying with the company,
or upgrading their phone again with the thought of "I was already paying that
extra amount before anyway".

Just a thought, but I wonder what kind of research has gone into this sort of
thing.

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macjohnmcc
Sadly you don't get a discount on your plans even if you don't get a
subsidized phone.

~~~
kenjackson
You do get a discount. But they are getting rid of the subsidized phones
(which honestly, for many/most people turned out to be a bad idea after the
introduction of Next).

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clamprecht
My 2-year AT&T contract just ended (and I kept service), but my monthly price
is still the same. Should my monthly price have gone down?

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kenjackson
Switch to a mobile share plan. The subsidized plan never gets cheaper. One
reason they were bad.

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jastanton
Wait, will this nullify existing plans? Should I rush to get an upgrade on my
device by signing up for a 2 year contract just to have the contract nullified
on the 8th leaving me with a new device and no contract?

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pen2l
That's typically not how these things work. You are bound to contracts you
sign -- and the contract would indeed stipulate a 2-year agreement of some
sort. Possibly, the contract could allow changes in a way that you can enter
the new 'iphone upgrade peogram' agreement... but it's probably to AT&T's
benefit, not yours. Point being, you can't win this game that easy. :)

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dman
Wonder if this will lead to people preferring lower priced SKU's once they
better understand the full cost of the Phone they are using.

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nlawalker
I think many people will not only start to look harder at lower-priced phones,
but they will consider going longer between upgrades, and become more
interested in second-hand phones.

The biggest thing going on here, in my opinion, is that there is now a
decoupling between "device" and "plan" in the consumer's mind where there was
previously a very strong coupling. Savvy users have been able to buy a phone
somewhere besides an AT&T store for a long time, but up until now it's never
been a normal/default choice compared to going into an AT&T store, buying a
phone there and signing a bunch of stuff that involves contracts and plan
changes and fees. The default expectation now is that I should be able to plug
a SIM into a phone and start using it without having to consult anyone, make
account changes, pay fees or other BS.

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smackfu
Yeah, my brother and sister-in-law are saving up for a new house. When their
phones reached the end of their Next plan after two years, it was effortless
to just keep using them at a now reduced cost, instead of shelling out
$30/month more each just to get the shiny new phone.

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pico303
Cool. Now I can switch to the Apple plan, get the AppleCare, and jump carriers
whenever the mood takes me.

