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July 16, 2013 10:26 pm
AT&T has become the second major US mobile operator to change its upgrade policy.
The move makes it easier for subscribers to trade in their handsets or connected tablets, and shortens the time between penalty-free upgrades from two to one year for subscribers who buy their own devices by paying monthly instalments.
The launch of AT&T’s “Next” programme comes less than a week after T-Mobile US unveiled its similar “Jump” upgrade programme which allows its subscribers to trade in their devices twice a year after the first six months for an additional $10 monthly fee.
T-Mobile US, which has been losing monthly subscribers to its larger rivals, is hoping that its new “more customer-friendly” upgrade programme will help stem the loss.
Both moves come as mobile operators face increased competition from a revitalised Sprint Nextel, now majority owned by Japan’s SoftBank, and slowing sales of smartphones which have driven the US industry for the past five years.
Under AT&T’s Next scheme, a customer will be able to choose between paying an upfront fee and signing a standard two-year contract for a new handset, or opt to buy their device using a monthly payment plan costing between $15 and $50 a month depending on the device, for 20 months.
Customers who choose the instalment plan will be able to upgrade their handset every 12 months without penalty and, if they decide to change their phone operator early, will pay the rest of the instalment fees rather than the highly unpopular early termination fee that most US mobile operators charge.
For example, a customer purchasing a Samsung Galaxy S4 would pay nothing upfront and then pay $32 per month, in addition to the monthly wireless service plan they chose. They would have the option to trade in their device and upgrade after 12 payments or keep using the device and pay off the instalment plan in full after 20 months. There is no penalty for paying off the instalment plan early.
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