Bonnie Cha

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T-Mobile, AT&T and Verizon Plans Promise Early Upgrades, but the Devil’s in the Details

The times they are a-changin’.

Over the past week, three of the four major U.S. wireless carriers have introduced new upgrade policies that will allow you to trade in your old phone for a shiny new one on a more frequent basis than every two years.

phone_upgrade_plans

First, T-Mobile unveiled its Jump plan. AT&T followed with Next, and today, Verizon announced its Edge upgrade program.

Great! No longer do you have to feel like a chump waiting around for your upgrade while everyone around you is rocking the latest gadget du jour. But how much are you really paying for this privilege?

The carriers are smart. All of these new plans look like a good deal. You get to pay for the full price of a phone in relatively low monthly installments, and you’re not locked down to a long-term contract. Then, depending on the carrier, you can upgrade after six months or a year. But as always, the devil’s in the details.

Some of these programs come with fees, while all of the carriers are using the plans as part of a broader effort to ditch the money they used to spend to subsidize new phone purchases. As a result, the added flexibility often comes at quite a cost.

Nonetheless, the programs have some appeal for early adopters and gadget enthusiasts who really want a new device every year or so. Given that, which provider offers the best plan?

The answer is complicated. T-Mobile, AT&T and Verizon’s plans all differ in device payment, upgrade frequency and voice and data plans. To help try to make sense of things, below you’ll find a brief explanation of each carrier’s upgrade program. Then, using the Samsung Galaxy S4 (retails for $650) as an example and choosing similar monthly smartphone plans, I calculated how much you would pay in a year. Here’s how it breaks down.

AT&T

AT&T’s Next plan allows customers to trade in their smartphones and tablets every year, as long as the device is in good working condition. No down payment is required when purchasing a phone, and depending on what model you pick, payments range between $15 and $50 per month based a 20-month cycle. On top of that, you will need to pay for one of the carrier’s individual or family plans — which aren’t getting any discount as part of Next.

So, the monthly payment for the Galaxy S4 on AT&T Next is $32 per month. A plan that includes unlimited voice and texts and three gigabytes of data will run you $120 per month. After a year, you’ll have paid $1,824 total before being able to upgrade to a new phone.

T-Mobile

T-Mobile Jump lets you upgrade to a new smartphone twice every year, but there is a $10 monthly fee to participate in the program. This is in addition to the monthly rate you pay for voice and data. Insurance is included in the program fee, whereas AT&T and Verizon charge for that separately (around $7 per month). Each device requires a down payment, and then the remaining balance is split equally over 24 months.

The down payment for the Galaxy S4 is $150, and if you’re a new customer to T-Mobile, you’ll need a SIM Starter Kit for $10, so you’ll pay $160 upfront. Every month after that, the monthly payment will be $20. T-Mobile’s Simple Choice plan, which includes unlimited talk and text and 2GB of data, costs $60 per month, on top of the $10 monthly program fee for Jump. When it’s all added up, you’ll have paid $1,240 for the year.

Verizon

With Verizon Edge, you pay the full retail price of a phone, along with a month-to-month service plan. The cost of the handset is divided into 24 monthly installments, and the first payment is due at the point of sale. If, after six months, you decide you want to upgrade your phone, you can do so, as long as you’ve paid 50 percent of the unsubsidized price and the phone is still in working condition.

Once again, using the Galaxy S4, you’ll pay $27.08 per month to cover half the unsubsidized price of the phone. With Verizon’s Everything Share plans, you’ll pay $100 per month for unlimited voice and text and 2GB of data. Your total for the year then would be $1,524.96.

AT&T Next T-Mobile Jump Verizon Edge
Program fee $0 $10 per month (includes insurance) $0
Device down payment $0 $160 (including SIM starter kit) $0
Monthly device payment $32 $20 $27.08
Monthly voice and data plans $120 (Unlimited voice and text, 3GB data) $60 (Unlimited voice and text, 2.5GB data) $100 (Unlimited voice and text, 2GB of data)
Year total $1,824 $1,240 $1,524.96

As you can see, T-Mobile is the cheapest of the three. This is because T-Mobile has taken the cost of device subsidies out of its rate plans, whereas AT&T and Verizon continue to charge the same prices for their data plans, even though you’re now paying full price on a phone.

So, when T-Mobile executives criticize their competitors for charging you for the same phone twice, they’re not just poking fun, they’re also telling the truth. The downside of T-Mobile is that it has a much smaller 4G LTE network right now.

And to be fair, none of these plans is much of a deal, at least when compared to buying a new phone every two years.

The latest smartphones are pricey devices, and no matter how you do the math, upgrading more frequently is probably going to mean paying a premium for the privilege. But for those who can’t stand missing out on the latest and greatest, there are now some additional options.

T-Mobile Jump is available now. AT&T Next launches on July 26, and Verizon Edge kicks off on August 25.


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