AT&T Next Upgradeable vs 2 year contract Smartphone Plan Review
Last update: 9/21/2018
The transition from 2 year phone contracts to AT&T Next installment plans
AT&T Wireless announced that the 2 Year Contract is ending January 8, 2016. New and Existing Customers will only be able to buy phones using the Next Installment Plan after this time. The move from the long time 2 year phone contract that included hardware and the plan, to separate the plan from the phone started in 2016.
AT&T created a new wireless phone plan in July 2013 called AT&T Next Installment to address the needs of customers who want to upgrade to the latest and greatest Smartphone every year. Normal Smartphone plans in the USA require shoppers to commit to a 2 year contract. They cannot change phones during this time unless they want to pay an expensive early termination fee, for cancelling their contract early.
AT&T Gives you up to $650 in credits when you switch.
BuyVia's AT&T Next Plan review shows that the Plan is a lot more advantageous than expected and maybe better than the normal 2 year contract, even if you do not perform the upgrade! 68% of iPhones sold in the 2nd quarter of 2015 were on the AT&T Next Plan.
- In a separate blog post, we analyze Verizon’s Edge Plan, which is similar to AT&T Next, we also analyzed AT&T Next vs Verizon Edge vs Apple iPhone Upgrade Program- Verizon later eliminated this Edge plan.
Be sure to download the BuyVia App, which helps you save money on items you want from stores you like, both online and locally.
AT&T changes its plans from time to time, so we will reanalyze it when the time comes. There are also limited time promotions like an occasional rebate with specific phones or credit to adding a new Next line.
The 2 year Contract is Costly
Two year contracts have been the norm in the US for years. If you wanted the latest phone, you would typically pay $199 and sign a 2 year contract. The phone's cost was heavily subsidized. A typical phone costs $649, so $450 was baked into your monthly bill. The problem is that after you finish paying off the phone in 2 years, your monthly bill would not fall. This makes it a BAD deal if you do not upgrade to a new phone after finishing your 2 years.
Prior to 2015, most people upgraded their phone within 2 years. With smartphones becoming more mature and features less worth the upgrade, the number of months before upgrading to a new phone will pass 26 in 2015 and approach 30 in 2016.
With the new installment plans like AT&T Next installment plan, you pay for the phone every month and once paid off, your monthly payments decrease. There is no interest charged.
Upgrading early with a 2 year Contract
With a traditional 2 year contract, a user wanting to upgrade to a new handset would have to pay the following:
- $325 Smartphone early termination fee
- $299 or $399 instead of $199 for the new phone
- Another 2 year commitment
This was a steep price to pay, hence the Next Plan was born.
If you are a good customer, nearing the end of a 2 year Contract, AT&T sometimes lets you upgrade to a Next plan before the full 2 years are up, usually at the 18 month mark. Call them to ask if you qualify.
AT&T Mobile Share Plan
In 2016 AT&T Wireless rolled out the new Mobile Share Advantage plan with more data for less money. It also added no overage charges, speeds will slow to a crawl after you hit your limit. This plan clearly shows the hidden costs of 2 year contracts.
- An allotment of of data costs $30/month for 1GB, $40 for 3GB, $60 for 6GB, $80 for 10GB,..
Costs for each Smartphone line
- $20/month if on Phone is on AT&T Next or Paid
- $40 a month if Phone is on a 2 year plan
The 30 month plan is now known as AT&T Next. The 24 month plan is now AT&T Next Every Year. The Next 20 month plan was delted in 2016.
Smartphone Product Cycle
The cellular industry is built around yearly releases of major products. Samsung and Apple introduce new flagship devices every year. Each year, customers have to make a decision whether they want to break their contract to upgrade to the newest Smartphone.
The Next plan allows users to upgrade every year without incurring penalties. There is always a catch, so we will examine the plan in detail. Most articles have labeled the Next Plan as expensive and a way for AT&T to generate more revenue. As you will see, this plan can actually be cheaper than the normal two year commitment that most people sign up for.
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Posted: January 23, 2021 7:32 AM PST
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Posted: January 21, 2021 5:20 AM PST
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Posted: January 20, 2021 11:59 PM PST
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Posted: January 19, 2021 11:59 PM PST
75% of people purchase their phone from their wireless carrier, instead of buying direct from Apple.
AT&T Next Plan Overview
Here are the main features of this AT&T Smartphone Plan:
- Get a new Smartphone every year - AT&T Next Every Year Plan
- Upgrade to a new Smartphone with eligible trade-in after 80% of retail price is paid - AT&T Next Plan
- Next Plan lasts for 24 or 30 months
- Available to new customers or existing customers if they are qualified for an upgrade
- This is an installment agreement along with wireless service
- No down payment, No upgrade fee, No financing fee
- No activation fee, but sales tax is due at signup
- Need to trade in the phone in good condition or else you’ll be charged extra
- When you trade in the Smartphone, you will receive nothing
- You will own the Smartphone after 24, or 30 months of payments, before that, you are just leasing it
- If you cancel or lose the phone, you have to pay the remaining balance
- Tablets are no longer on the plan
- Limit of 4 Smartphones
- Early payment is ok
- 14 day return period with a $35 restocking fee
- After you trade in your Smartphone, you can start a new Next Plan
AT&T Next Every Year Plan for iPhone 7 or Samsung Galaxy S7
We will list out the charges due when you setup a Next 24 month Plan for 2 of the most popular Smartphones on AT&T Wireless.
iPhone 7 32GB or Galaxy S7 32GB with Next Every Year Plan. Full price is $649. This allows us to upgrade after one year. The S7 may be slightly cheaper.
Amount due at Sale:
$20 Activation fee
Sales tax on full value of phone $60 in our area.
Total due at time of sale: $80 - This is the main advantage!
AT&T Monthly Plan:
$27.09/month installment charge for iPhone 7 or Galaxy S7 for 24 months
Mobile Share 3GB with unlimited talk and text
$40/month + $20 Device Access Charge = $60/month – this is $15 cheaper than 2 year plan.
Total due each month: $87.09
Amount paid after one year:
$87.09 X 12 months = $1045 + $57 Sales Tax = $1102.
You can now get a new Smartphone if you wish.
Amount Paid to fulfill Next contract: (24 months)
$87.09 X 24 months = $2090+ $57 Sales Tax = $2147
iPhone 6 or Galaxy S7 value after 2 years, is now roughly $250
Surprise – this is $75 more than normal 2 year plan over the same 20 months!
True premium over 2 years is $165 for the AT&T Next Plan when compared to traditional 2 year.
First two years of Smartphone Ownership:
Year 1: iPhone 7 or Galaxy S7 $1102
Year 2: iPhone 7S? or Galaxy S8? $1102
Total cost for 2 years: $2204
$75 per year premium over 2 year contract to get the latest phone
Caveat – you do not own the phone unless you fullfill installment period
After fulfilling your phone's installment plan (24 monthly payments in the case of Next plan), your bill would fall to $60/month because you paid off the phone and you now own it. This in contrast to a 2 year plan where the bill would remain the same at $70. Both plans have the same monthly bill after contract fulfillment.
AT&T 2 Year Contract for iPhone 7 or Samsung Galaxy S7
We will list out the charges due when you setup a Standard 2 year commitment for 2 of the most popular Smartphones on AT&T Wireless.
iPhone 7 32GB or Galaxy S7 32GB with Mobile Share. This allows us to upgrade after two years.
Amount due at sale:
$45 Activation fee
$199.99 for the Smartphone
Sales tax on full value of phone $60 in our area.
Total due at time of sale: $199.99 + $60 Sales Tax + $45 activation fee = $305 - A lot more than Next Plan
Mobile Share 3GB with unlimited talk and text
Total due each month: $70.
Amount Paid to fulfill contract: (24 months)
$70 X 24 months = $1680 + $199.99 + $60 Sales Tax + $45 activation fee = $1984.99
iPhone 7 or Galaxy S7 value after 2 years is now roughly $250.
Surprise – This is Less than Next Plan when looking at full contract fulfillment and 24 months of use.
First two years of Smartphone Ownership:
Year 1,2: iPhone 7 or Galaxy S7 $1981.99
Total cost for 2 years: $1981.99
You are ready to get another phone finally!
After 2 years your bill would remain the same at $70/month even though you paid off the phone, but Next would drop to $60/month. It takes 5 months to make up the difference.
When is the AT&T Next Plan worthwhile?
There are specific situations where the Next Plan is worth considering. One of these situations might depend on your timing on fulfilling the contract.
- You are already on AT&T
- If you want to have the latest Smartphone every year
- You don’t sell your Smartphone after fulfilling the contract
- If you like the shorter 20 month contract
- If the 20 months brings you closer to an Apple (September) or Samsung (February) release date
AT&T Next Plan Conclusion
AT&T Next Installment Plan adds more ways for Smartphone owners to upgrade to the latest technology without waiting 2 years for their contract to be finished.
- If you are a frequent upgrader, this Next plan is a no brainer.
- If you are interested in a shorter 20 month contract, the Next Plan is also the way to go.
- If you plan to hold onto you phone for 2 years, the traditional 2 year plan is $75 cheaper.
- Both plans cost about the same after about 2 years, 8 months.
Do you have a different opinion of this AT&T Next Plan review or a suggestion?
Please leave a comment below.