T-Mobile Jump, AT&T Next and Verizon Edge compared, or why most upgrade plans are a complete rip off

By on July 18, 2013, 2:34 PM

If you’ve been keeping up with the latest wireless carrier developments, you probably already know that T-Mobile’s Jump plan allows for twice a year device upgrades with an initial down payment while AT&T’s Next grants once a year upgrades. Verizon's new Edge plan is similar to Jump in that you can upgrade once every six months, but there's a catch.

It’s all a bit complicated and there’s certainly a lot of math involved, but stick with me here as I run through a few examples using a 16GB Samsung Galaxy S4 to see how it all breaks down.

With T-Mobile, you could purchase the S4 today and sign up for their Equipment Installment Plan (EIP) which lets you make an initial down payment at the time of activation and pay the remaining balance over the next 24 months. That means you’d be looking at $150 upfront and $20 per month plus another $10 per month for the Jump plan.

After six months, you will have paid $150 (down payment) plus $120 (for six months of EIP) plus $60 (for six months of Jump) for a total of $330. At this time, you can trade in your Galaxy S4 for another premium smartphone and repeat the cycle once again. For conversation sake, we repeat the cycle three more times and after 24 months, you’ve paid $1,320 and have gone through four devices. Keep in mind, however, that T-Mobile’s plan does include accidental damage protection.

With AT&T’s Next plan, there is no down payment. Instead, the cost of the device is split equally across a 20-month period. The Galaxy S4 retails for $640 without a contract which equates to a monthly payment of $32 per month on top of your wireless bill. Furthermore, AT&T only allows upgrades once a year.

After 12 months, you will have paid $384 for the S4 at which time you trade it in toward a new device. To keep things simple, let’s say the new device also retails for $640. So after 24 months, you will have paid $768 for only two phones (remember, AT&T only allows yearly upgrades). It’s also worth mentioning that the Next plan doesn’t include any type of handset insurance which could add more to your bill if you sign up for it.

Verizon’s Edge plan was confirmed today and it doesn’t require a down payment either. Instead, you take the full cost of the device and split it up over 24 months. For our comparison, the S4 retails for $650 through Verizon without subsidy. That means you’ll pay roughly $27 and change each month over the next six months for a total of $162.

At this time, you can elect to trade in your device for a newer model but you first must pay off at least half of the original device price. All said and done, you are looking at $325 out of pocket (half the price of the $650 S4). Trade it in, rinse and repeat a few more times and after 24 months and four handsets, you would have spent $1,300.

To recap, T-Mobile’s plan would cost you $1,320 for four devices, AT&T would set you back $768 for just two phones and Verizon commands $1,300 for four handsets over a two-year period.

Monthly Rate Plans


Keep in mind, however, that we are overlooking one massive part of the equation: monthly rate plans.

With the traditional two-year service agreement, customers pay a subsidied sum upfront for a new handset and the rest of the subsidy is rolled into the monthly rate plan and earned back by the carrier over the two year contract. The caveat with this model is that, after two years, your device is paid off but your rate plan stays the same. Carriers continue to collect extra money from the subsidy long after it has been paid off (assuming you don’t buy a new phone and sign another contract).

T-Mobile was the first to break this tradition back in March. By doing away with phone subsidies and contracts, the base rate plan for an unlimited talk and text plan is just $50 – a price that reflects only the cost of your service. Customers could elect to use their existing handset with the plan, buy a new one at full price up front or buy one with a down payment up front and spread out the remaining balance over 24 months.

 
T-Mobile Jump
AT&T Next
Verizon Edge
Upgrade frequency
twice a year
once a year
twice a year
Galaxy S4 retail price
$630
$640
$650
Plan fees
$150 down payment
$20 per month for Equipment Installment Plan (EIP)
$10 per month for Jump
$32 per month
(device cost split into 20 monthly payments)
~$27 month (device cost split into 24 monthly payments)
+ Half price of the phone before upgrading
After 6 months
$330
n/a
$325
After 1 year
$660
$384
$650
After 2 years
$1,320
$768
$1,300
# of phones in 2 years
4**
2
4
 
Monthly plan subsidy*
$0
$18.33
$18.75
Cost after 1 year
(rapid upgrade
+ plan subsidy)
$660
$604
$875
Cost after 2-years
(rapid upgrade
+ plan subsidy)
$1,320
$1,208
$1,750

* Monthly plan subsidies are estimated based on what carriers take in with service plans, which already include a device subsidy.

** T-Mobile's Jump plan requires a $150 fee every time you switch to a new phone. However, if you were to decide not to change it every 6 months, the total cost of the plan would be less. The table above assumes you'd do take 4 phones in a 24-month period ($25 "subsidy" per month).

Either way, what’s important here is that once you have a paid off phone, you are no longer paying for a subsidy each month. With AT&T and Verizon, however, that isn’t the case. Even with the upgrade plans, you are still paying the same monthly rate as you did with a two year agreement to cover a subsidy – a subsidy you no longer use.

That said, it’s hard to justify upgrade plans from AT&T or Verizon as you are essentially paying twice for a phone. Sure, you get to upgrade early and yes, you do have access to more LTE coverage (compared to T-Mobile), but unless they reduce the price of monthly service to reflect the absence of a phone subsidy, it’s hard to see it as little more than a complete rip off.

Sprint, you're up next.




User Comments: 14

Got something to say? Post a comment
1 person liked this | howzz1854 said:

T-mobile is the first of all the major network to understand the fact that customers are fed up paying high packaged monthly rate plans that most will likely never fully use. ATT, Sprint, Verizon don't give you the choice of lowering your talk plan to off-set the data, in the end, you're FORCED to pay a huge chunk of talk minutes that you'll never use. that's a fat chunk of profit, and on top of that, they charge you a premium for data. I switched away from ATT for this reason, and now have t-mobile. and guess what, it's not complicated at all. unlimited talk + text and comes with a free 500MB data all for $50. try getting that at ATT, you'll be looking to spend $80+. and now ATT is trying to bill me for the final month for $490!!!, $351 of that is early termination fee (my wife and I), but here's the kicker... $60 of that are junk random fees they piled up on me, yes those random utility fees, and random XYZ fees that are $1, $2 each that totals $60!!!! needless to say, I am filing a complaint with FCC.

tipstir tipstir, TS Ambassador, said:

I was on a very good deal plan with T-Mobile I had to buy the phone. Then I got unlimited talk, text, web data, and 4G up to 100MB then after that it was 3G for $50 a month, but wait they had paid me $5 a month for 5 years. So the bill was only $45 plus tax $47 a month. The issue was

4G was really 3G

Caller ID keep on saying a different name

T-Mobile Customer Care fix it but this time it was a different name.

They could never fix that issue.

Signal was problematic always

Calls ways dropped within the first hour

The only thing was good the service was you can hot spot it fro free.

When I had cancelled the service they offered me the the same rates for $25 a month instead. Should I had gone with it? Nah!

Now on Verzion regular billing, cost like $200 but now it's down to $130 but with all the taxes and fees it's like $150. If your late with the bill they add $5 bucks more.

Service is very good.

4G LTE mostly like 3G LTE

No calls dropped

Can't use the web much they get your on that data plan.

Can't see why the government doesn't regulate these companies they charge so much and they all share the same bands (towers)

1 person liked this | Fbarnett Fbarnett said:

I like how the assume that somebody pays retail for the phone. Most people get a free phone or 49 or 99 bucks. All the phone companies are a rip off > I just switched to TING from Sprint. I am saving $180.00 per month on my family plan. They use Sprints network my coverage is exactly the same. The money savings is unreal. Now if I can only do that with 10 other things.

Somebody Mentioned Ting in these forums and I looked them up best decision I ever made

tipstir tipstir, TS Ambassador, said:

T-Mobile phone I got the first one free, but I didn't like it. They told me I could buy any of what they had. So I did that. With Verzion data plan phones cost me like $300 bucks with the GF Corp discount I got it for $250. Odd I gone into a BJS Wholesale they have Verizon Corp department in the warehouse the guy told me this is the new phone that replaces yours I can give it to you for $250 plus the service plan would be the same as you have it. He said my phone last year cost $650 to buy.

To me it's all a racket with cell phones.

howzz1854 said:

I was on a very good deal plan with T-Mobile I had to buy the phone. Then I got unlimited talk, text, web data, and 4G up to 100MB then after that it was 3G for $50 a month, but wait they had paid me $5 a month for 5 years. So the bill was only $45 plus tax $47 a month. The issue was

4G was really 3G

Caller ID keep on saying a different name

T-Mobile Customer Care fix it but this time it was a different name.

They could never fix that issue.

Signal was problematic always

Calls ways dropped within the first hour

The only thing was good the service was you can hot spot it fro free.

When I had cancelled the service they offered me the the same rates for $25 a month instead. Should I had gone with it? Nah!

Now on Verzion regular billing, cost like $200 but now it's down to $130 but with all the taxes and fees it's like $150. If your late with the bill they add $5 bucks more.

Service is very good.

4G LTE mostly like 3G LTE

No calls dropped

Can't use the web much they get your on that data plan.

Can't see why the government doesn't regulate these companies they charge so much and they all share the same bands (towers)

I just switched to T-mobile right after they activated their 4G LTE. I heard their network can be spotty, but since I am in the LA metropolitan area, the 4G is legit, and very fast. I would say is comparable to the reception that I had when I was on ATT. honestly, I am loving what T-mobile is doing now. back years ago I used to have T-mobile (previously voicestream), they used to suck, and that's when I switched to Sprint, and later ATT. but now it seems with the management change, t-mobile is really turning around and giving what customer wants. **** AT&T

MilwaukeeMike said:

Great breakdown, but there's one unknown for me about the ATT and Verizon plans and that's the tax. I have T-mobile and they charge you the tax on the entire amount with the down payment. In Wisconsin that's 5.5%. If you live in CA though it's 7.5% That means your $150 down payment is really $197.

With Verizon you pay for the great network, that's known. And ATT doesn't require a down payment. That'll be attractive to a lot of people. Americans are much better at understanding 'Ohhh, I get it now for FREE!' over, "How does this monthly payment fit into my monthly budget"

Mallok Mallok said:

Somebody Mentioned Ting in these forums and I looked them up best decision I ever made

Hopefully that was me (but either way I'm glad you found them). I think they are great. I've had service for about 3 months now and I can't get over the savings. For those not requiring LTE speeds it has to be the cheapest and best around.

p51d007 said:

I finally got off the contract merry-go-round 2 years ago and wouldn't go back unless I'm forced to.

Straight talk, G-Note when it came out and I'm way ahead with not paying 130+ per month from the ripoff at&t deathstar. Yeah, straight talk might have a dropped call here, not as fast data there, but for my use, it's perfect.

SirGCal SirGCal said:

I don't care what it is; if it's not 100% unlimited, not interested. That's why I went to Sprint 4 years ago and never looked back. When we were in the hospital with my twins for 3 months, I used 400G a week there. Called to make sure even I wasn't too excessive. They giggled and said 'unlimited my friend, no problems' and even hung up on me with a giggle. That's what I needed when I needed it and what I expect from any 'smart phone' service. I'll never go to a tiered service again. I left AT&T and won't go back any time soon. Not to mention the connection issues we had constantly...

tipstir tipstir, TS Ambassador, said:

Smartphone cost is those data plans. My GF had Droid 4 she didn't want it anymore so I had taken her back to a Verizon Corp Store.

I had to order the phone she wanted through Amazon Vendor and then let the VCS CST merge her service over to the LG Verizon non-smart phone she wanted with the keyboard. CST kept saying why don't you want a smart phone, she told them why they kept on repeating this while they were reprogramming the her new phone.

They gave me back $79 bucks for her Droid 4 was still in mint condition. Cellphone and Smartphone is not cheap. Pay phones are almost gone and those around are not cheap.

So today we all walk around was a cell connected to us in one way or another..

RenGood08 RenGood08 said:

Haha just because you can upgrade, doesn't mean you should. You are just wasting money on a phone that is as good as the one you have. The only reason why you'd need an upgrade is if your cellphone is on the fritz and its almost virtually impossible to use without it messing up. THEN that would justify for an upgrade. But getting an upgrade every 6 months just because the latest and greatest comes out, that is a waste. If your phone is fine, keep it. If its crapping out on you, trade it up for something nicer that will hopefully last longer!

drjekel_mrhyde drjekel_mrhyde said:

Buy $150 Lumia 521, wipes hands on pants, and walks away

otester said:

Mobile plans really do suck in America, one thing I like about the EU, most countries have unlimited plans at cheap prices but good performance too.

tipstir tipstir, TS Ambassador, said:

Haha just because you can upgrade, doesn't mean you should. You are just wasting money on a phone that is as good as the one you have. The only reason why you'd need an upgrade is if your cellphone is on the fritz and its almost virtually impossible to use without it messing up. THEN that would justify for an upgrade. But getting an upgrade every 6 months just because the latest and greatest comes out, that is a waste. If your phone is fine, keep it. If its crapping out on you, trade it up for something nicer that will hopefully last longer!

Listen she had her mind made up and she wanted non-smart phone and hated the Droid 4. So I got her LG from Verzion with the slide out keyboard is what she wanted. She doesn't like touch screen. Yeah I know they wanted her not to do that but that's what she did do. Cost less per month she said and she was never using the Android apps anyway.

To me they have these non-smart phones but they don't want to sell them or carry them in the stores. You have to go out of your way to get them.

RenGood08 RenGood08 said:

Listen she had her mind made up and she wanted non-smart phone and hated the Droid 4. So I got her LG from Verzion with the slide out keyboard is what she wanted. She doesn't like touch screen. Yeah I know they wanted her not to do that but that's what she did do. Cost less per month she said and she was never using the Android apps anyway.

To me they have these non-smart phones but they don't want to sell them or carry them in the stores. You have to go out of your way to get them.

I was replying to the article, not to you...but you know. Not everyone loves the new technology these days. I may like it, but it doesn't mean everyone does. I like having an Andriod, because its more convenient to have everything on my cellphone so I rely on my laptop less, since I have a toddler that demands my undivided attention 24/7. I can check all my email on my cellphone so I don't have to take my total focus off my son. (its mostly junk mail anyway lol.)

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