AT&T Next allows mobile subscribers to get a new smartphone or tablet every year with no down payment or upgrade fee.
The consumer would pay a monthly fee on top of the service plan, and could trade up to a newer device after 12 months or keep going to pay off the existing device for a total of 20 months.
The telecom giant will not levy any financing charge. Monthly fees would range from $15 to $50, depending on the device.
For instance, Samsung’s Galaxy S4 smartphone would cost $32 per month. This is in addition to the monthly wireless service plan they select.
AT&T, the No. 2 U.S. mobile provider, did not share cost for Apple iPhone 5.
AT&T mobile users have the option to trade in their device and upgrade after 12 payments or to keep using the device and pay off the installment plan in full after 20 months. There’s no penalty for paying off the installment plan early.
Handset subsidies — especially in America and Europe — are a major contributor of earnings for smartphone companies. For instance, the $200 paid by consumers for devices like the iPhone 5 and Galaxy S4 barely cover the estimated build prices on those phones.
AT&T Next, which will be on from July 26, may impact handset makers’ revenue. But the telecom giant is just following T-Mobile.
AT&T Next is available for new AT&T customers or existing customers who are upgrade eligible.
“With AT&T Next, customers can get the newest smartphone or tablet every year with no down payment. That’s hard to beat, and it’s an incredible value for customers who want the latest and greatest every year,” said Ralph de la Vega, president and chief executive officer of AT&T Mobility.
AT&T is under pressure to improve its subscriber base as it loses market share to telecom giants like Verizon Wireless, and smaller rivals like T-Mobile have started to compete more aggressively for its customers.
No. 4 U.S. mobile provider T-Mobile USA earlier said that its customers can upgrade their smartphones as often as twice a year.
T-Mobile US charges an upfront fee for the device on top of $10 per month to sign up for its Jump branded upgrade option, and installments of up to $20 per month as well as its monthly service fee.
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