Yesterday, AT&T revealed its Next plan, which allows for monthly device payments on a new smartphone or tablet annually, with monthly prices falling between $15 and $50. If the first thing that popped in your mind was “T-Mobile” when the plan was announced, you’re not the only one, and now the latter carrier has stepped forward with some biting things to say about AT&T Next.
Under AT&T’s new plan, new and current customers will be able to grab a new tablet or smartphone every year, doing so without a down payment or fees. Instead, the cost of the device will be spread over the course of 12 months or 20 months, depending on what the subscribers chooses. The program requires at least 12 months of device payments after which point the device can be traded in or kept.
If kept, the subscriber will have to make payments on it for another 8 months, bringing the total number of payments to 20. The monthly device charge will depend on the device that is selected, with the Samsung GALAXY S 4 costing users $32 per month. As such, the total cost of the device under the program would be $640 if the subscriber chose to keep it.
Such device payments are on top of the regular monthly plan payments, and work out to higher device rates than what you’d get by taking on a full 24-month contract and gaining the subsidization that comes with that. Today we spoke with a T-Mobile spokesperson who has responded to AT&T Next, saying that “while imitation is the sincerest form of flattery, AT&T has gotten it all wrong. Their offering is a terrible deal for consumers.”
“AT&T has separated the cost of the phone and the rate plan, but they forgot to pass on the monthly service plan savings to the customer. Instead, customers are paying the same high monthly service bill, but with no device subsidy. That means customers in this program will essentially pay for their phone twice!”
To put it simply, when a customer receives a subsidization on the price of a device, that discounted rate is reflected in the price of the monthly plan fee. If that subsidization is not in place, then the cost of the monthly plan should be lower, which is the approach T-Mobile took. This isn’t the case with AT&T Next, however, with subscribers paying the same monthly prices they normally would, but also shelling out the full price for the phone.