AT&T has answered the call for better smartphone upgrade options with its new Next plan, just one week after T-Mobile introduced its own Jump plan. Starting July 26th, new or existing upgrade eligible AT&T customers can step up to a new device after 12 payments and avoid contracts altogether. Plus, unlike T-Mobile, there’s no down payment for the new device. But is it the better value?
Those who sign up for AT&T Next will pay anywhere between $15 to $50 per month for the device, as well as the same voice and data plan fees that other AT&T customers pay. You don’t get a discount on the device or the plan; it’s just another way to pay. T-Mobile’s plans are still cheaper.
After you make your 12th payment with AT&T Next, you can either trade your device in and upgrade to a new device, or you can keep using it and have no payments after 20 months. With T-Mobile Jump, you can upgrade up to twice per year, but you do need to pay the down payment for the new device each time. Jump customers can also choose to keep their device and can leave the Jump program at any time.
How does AT&T Next compare with T-Mobile Jump in terms of overall costs? Say you wanted to buy a Galaxy S4. On AT&T you’ll pay $32 monthly for the phone, plus the fee for whatever data plan you sign up for. With a 3GB data plan with 450 voice minutes and unlimited texts, that comes out to $90 per month. So after 12 months you will have paid $1,464 before being able to upgrade to a new phone.
On T-Mobile Jump, you pay $10 per month for the privilege of upgrading up to twice per year, a fee that also covers phone insurance. A 2.5GB data plan that also includes unlimited voice and texts costs $60 per month. The Galaxy S4 costs $159 up front (when you include the SIM Starter Kit) and then $20 per month. That comes out to $1,239 after 12 months, or a savings of $225 versus AT&T. If you wanted to add insurance, which T-Mobile includes in its Jump plan, the savings would jump to $345.
If you wanted unlimited minutes and 4GB of data on AT&T via its Mobile Share plan, you’d be looking at $130 per month for service in addition to $32 for the S4. After 12 months, that’s a total of $1,944 without insurance, or $705 more than T-Mobile.
Things get a little more complicated when you go to upgrade to a new device. On T-Mobile you’ll need to pay the up front cost for the smartphone after you trade in your existing one, while AT&T’s Next plan will simply let you start paying a monthly fee for the new smartphone.
Ultimately, you’ll need to weigh the greater freedom T-Mobile gives you with up to two upgrades per year–though we don’t expect many consumers will do that–and its cheaper monthly data plan versus the no down payments for AT&T and its larger 4G LTE network. For now T-Mobile looks like the better deal. But given that Verizon is expected to debut its own upgrade plans as soon as this week, you may not want to pull the trigger just yet.