There are two possible scenarios consumers encounter when buying a new cell phone. Wait until your contract expires and sign a new one with a discounted phone upgrade, or pay an unsubsidized rate to purchase a phone without a new contract.
The price difference between the two options is massive. An unsubsidized 16gb iPhone 5 costs $649.99, whereas one purchased with a contract costs $199.99.
Most customers are on a two year cycle and are only available for upgrades when their contract expires, even if their phone breaks.
However, USA Today reports that AT&T recently announced “Next” a new program that speeds up the cycle and allow users to get new phone upgrades more often.
“Next” works a bit differently than consumers are used to. Customers will pay monthly rates ranging from $15-$50 per month, which pays for the price of the phone, in addition to their service contracts. If they choose to keep their phone, they simply continue paying the rate for an additional eight months, and keep the phone rather than return it when the year expires. If they choose to get a new phone, the cycle repeats.
“Next” will be available starting July 26.
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