AT&T follows T-Mobile's lead in making upgrades more affordable

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Not to be outdone by rival T-Mobile, AT&T on Tuesday announced a new program that will allow customers to upgrade to a new handset every year. AT&T Next borrows some elements from T-Mobile’s Jump program as well as their monthly handset installment plan and meshes them all into a single bundle.

Instead of signing a two year contract and getting a phone (or tablet) at the subsidized price, Next allows the retail price of the new device to be split up and spread across 20 monthly payments that are rolled into your standard service bill. Users can elect to pay off the handset faster or simply ride out the minimum payment plan.

For example, a user could purchase a Samsung Galaxy S4 with no down payment and pay $32 per month in addition to their monthly wireless service plan. After 12 monthly payments have been received, AT&T allows users to trade in the device for a brand new model without any upgrade fee, financing fee, down payment or activation fee.

The monthly payment plan will reset to reflect the cost of the new device, however. Alternately, a user could continue to pay on the old device and once it’s paid for, it becomes theirs to keep.

The program kicks off on July 26 and is available for new or existing customers who are upgrade eligible. Small business customers aren’t allowed to join at this time but that is expected to change at some point. All tablets and phones (including the iPhone, which is typically left out of promotions) are eligible for Next and users can even keep their grandfathered unlimited data plans.

My only concern / question is, will monthly service plans be any cheaper to reflect the current subsidy model or would a user simply be tacking on an extra $32 (or however much a new device would cost when divided by 20) to what they pay now under a subsidized contract?

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