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CUSTOMER RELATIONSHIP MANAGEMENT NEWS. UPDATED 10 MINUTES AGO.
You are here: Home / Mobile Industry News / AT&T Offers 30-Month Payment Plans
AT&T Offers 30-Month Payment Plans
AT&T Offers 30-Month Payment Plans
By Jef Cozza / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
NOVEMBER
05
2014
Mobile phone buyers will soon be able to spread the cost of new handsets over 30 months, at least if they buy their phones from Ma Bell. AT&T, the second-largest mobile phone company in the U.S., announced a new payment plan on Tuesday that would give customers two and a half years to pay for their phones. The company currently offers both 12-month and 18-month payment plans.

Under the plan, customers can buy new phones with no money down. Dubbed AT&T Next 24, the new payment plan allows users to upgrade their phones after two years. But in order to upgrade a phone that has not been fully paid off, customers will be required to turn their old handsets over to AT&T before getting their new ones.

Almost Paid Off

Essentially, users will have paid off 80 percent of phones that they no longer own. AT&T, meanwhile, will be able to resell the pre-owned handset. Users will have the option of waiting an additional six months to pay off the balance on their existing phones, but AT&T is hoping most will opt to trade theirs in at the 24-month mark.

The company seems keen to push its new program. It is offering customers with existing two-year contracts the option to break their contracts early if they switch to Next 24. It is also offering a $150 credit to new customers switching to AT&T and buying smartphones.

Aside from that carrot, the company is also hitting existing customers with a pretty heavy stick: AT&T customers with two-year contracts who recently upgraded to the iPhone 6 discovered that the company had quietly increased their monthly access charges to $40, from $15 to $25. Over two years, the price hike adds up to an additional $600, very nearly the cost to buy a new, unsubsidized iPhone. AT&T is also charging customers an additional $40 for upgrading to the new iPhone.

Installment Instead of Subsidy

The Next 24 model represents a distinct change from the traditional mobile phone billing structure. In most cases, mobile carriers offer users handsets at highly subsidized prices to lock them in to two-year contracts. The phones on Next 24, however, will not be subsidized.

The new, unsubsidized payment plans that offer early upgrades appear to be popular with customers. AT&T said that about half of its new subscribers and existing customers opt for one of their Next plans rather than subsidized two-year contracts.

The move away from the subsidized pricing model first began with T-Mobile. Looking to take the offensive against larger carriers such as AT&T and Verizon, T-Mobile has been targeting customers with no-contract, no-subsidy service agreements. Sprint, meanwhile, has also suggested that it might begin offering installment programs in lieu of subsidized contracts.

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