AT&T just announced a new program to allow morons to upgrade to a new device every 12 months. first, here’s how it works: choose any device at full retail price, pay for the device in monthly installments over a 20 month period, at the 12 month point, you may return the device to cover the remaining 8 months and start anew with a new device.
they claim that this benefits customers by allowing you to upgrade your device every year, pretty much whenever your brand of choice will release a newer model. unlike T-Mobile’s “JUMP” program, you pay nothing upfront and no additional monthly fee; you only pay the monthly installment on top of your normal bill and the plan also includes tablets. now here’s where the theft occurs:
Your monthly bill already takes into account the cost of subsidizing a device.
let’s use the iPhone for example: when you buy an iPhone for $199, you sign a contract for 24 months of service. this monthly fee you pay includes not just the cost of service, but also the remainder of the phone’s actual retail price of $649. this is called SUBSIDIZATION, where the true cost of the device is partially subsidized to lower your initial cost, in this case, turning a $649 iPhone into a $199 upfront charge. AT&T plans on recuperating the remaining $449 from the cost of maintaining service for a period of at least 24 months or through their $325 Early Termination Fee.
AT&T’s Next program instead takes the $649 retail price of the phone, splits it into 20 equal payments of $32.50, and adds that on top of your monthly bill… a bill that’s already priced to offset the cost of a device subsidy. it’s a horrible deal as you’re now paying twice for a device and in the end, you cannot keep it unless you choose to forgo an upgrade and pay it off fully after 20 months. however, once you do that, you’re 4 months away from paying almost DOUBLE for the same device.
choosing their Next program makes you an idiot. everyone is better off paying the subsidized price and signing a 24 month contract. if you want to upgrade early, sell the device and use the money to pay the ETF, buy another phone at the subsidized price and sign another 24 month contract. despite the program being a clear ripoff, AT&T will sign up thousands, if not millions of people because they’re either idiots, too lazy to do the “contract shuffle,” or just can’t afford to drop $200-300 at a time. and if it’s the latter, you really need to refocus your priorities because you can not afford a smartphone.
the reason why AT&T can get away with offering such a scam under the guise of a legitimate “deal” is that the average US consumer is a drooling mouth breather.