If you recall, the day after AT&T unveiled its Next upgrade plan, which allows users to pay for a device monthly with various terms for upgrading, T-Mobile sent out some vocal statements challenging the program. This spiraled into a sort of back-and-forth bickering betwixt the carriers, each lauding their respective programs, and now T-Mobile has fired off another jab at its competitor, tossing Verizon’s recently unveiled Edge plan into the mix.
The jabs come in the form of two print ads, one of which goes out today, and another that is slated for release on Thursday. In the ads, T-Mobile features some snippets from various media sources that have likewise criticized AT&T’s Next plan, calling it “underhanded,” “sneaky,” and other sorts of passive jabs. In addition, the company’s CEO Mike Sievert also gave a lengthy criticism of both AT&T Next and Verizon’s Edge.
Said Sievert: “Had AT&T with “Next” and Verizon with “Edge” really taken our lead and unveiled offerings worthy of serious consumer consideration, we’d have to give them credit … On the surface, their programs look okay. For the first time, these old guard phone companies seemed to be acknowledging that a certain segment of customers hates being locked into the same phone for 730 days. But dig a little deeper, and you’ll see they don’t get it at all. Or they don’t want to.”
Under AT&T Next, subscribers have an option of taking on a device without down payment for a monthly fee, which ranges from $15 to $50. The payments must be made for the duration of 12 months, at which point the device can be turned in for an upgrade, or for 20 months if the user wants to keep the device. Using the GALAXY S 4 as an example, which has a monthly price tag of $32, the subscriber would end up paying $640 total if they chose to keep the device, or $384 for 12 months.
Under Verizon’s Edge, users can get a device and have the full retail price of the handset spread over 24 months. If the user wants to upgrade, they can do so at the 6 month point, being required to pay half the cost of the smartphone’s full retail price.
T-Mobile’s criticism of these plans is that they fail to factor a discount into the monthly service price that results from the carrier not having to subsidize the price of the handset by using a contract. With a contract, the cost of the phone is reduced and rolled into the monthly price for the duration of the contract. Without the subsidization – meaning when consumer’s pay full retail price for the phone – the natural assumption is that the monthly price for the plans should decrease to reflect this. And that is where the crux lies.