How many phones do you want to use in two years? One? Two? Four? Photo: Arial Zambelich / WiredThe new upgrade and “no-contract” plans from T-Mobile, AT&T, and Verizon Wireless are made for people who frequently feel the burning need to get the newest, greatest device on the market.
Unlike traditional smartphone plans, which require you to wait up to two years between purchases to get a new phone at a price fully subsidized by the carriers (usually $100 or $200), these new plans let subscribers acquire a brand new phone as often as twice per year. But when you switch to a newer phone, you’re either borrowing the handset from the carrier and handing it back when it’s time for your next upgrade, or you’re buying it at a higher, unsubsidized price and paying it off in monthly installments that get tacked onto your bill. That might sound like a sweet deal on the surface — there’s potentially no up-front payment for a phone and no need to wait out a two-year contract to get another shiny handset. However, these plans come with so many caveats and restrictions that they’re only worth it to people who are desperate to be super-trendy and must
own the latest gadgets. Also, the options to buy the phones are more costly, so these plans will only appear attractive to people with the extra money to spend.
The major carriers apparently think there are enough people beneath this umbrella, or at least enough customers who can be tricked into thinking these plans are a good buy. But if you’re switching carriers or starting off fresh and the advantages of these new upgrade plans do
suit you, at least be informed. Check the chart below to see which deal is best for you. But keep in mind that you’ll end up spending a whole lot more to own your device.T-Mobile JumpAT&T NextVerizon EdgeStandard Two-Year ContractAvailabilityNowJuly 26August 25NowCost of Phone (iPhone 5, 16GB)$21/month, $156 up front$32.50/month (total cost divided by 20 months)$27.08/month (total cost divided by 24 months)Typically $200 up frontAllowed UpgradesTwice a yearEvery 12 monthsEvery six monthsVerizon, Sprint (Google sells unlocked version for AT&T and T-Mobile)Total Phone Payments Required Before You Can UpgradeSix payments: $28212 payments: $39050-percent of phone cost: $325Up front of $200Cost of Service (Individual)$10/month to enroll in Jump, $50 to $70 for service$60 to $140$90 to $140Same as above, depending on carrierWhen You Can Leave CarrierAfter you've paid off your last handset in full or returned it.After you've paid off your last handset in full or returned it.After you've paid off your last handset in full or returned it.After two-year contract.Total Cost of Phones w/ Max Upgrades Over Two YearsFour phones: $1,128; own noneTwo phones: $780; own noneFour phones: $1,300; own noneOne phone: $200; own oneMain Drawbacks and CaveatsYou must pay the full unsubsidized price for a phone in order to own it, or else give it back when you upgrade. To leave the carrier, you must return the device or pay for it in full.You only get to upgrade once a year. You must pay the full unsubsidized price for a phone in order to own it, or else give it back when you upgrade. To leave the carrier, you must return the device or pay for it in full.You have to pay for half of the phone before you can upgrade. You must pay the full unsubsidized price for a phone in order to own it, or else give it back when you upgrade. To leave the carrier, you must return the device or pay for it in full.You have to wait two years to upgrade.
If you must go with one of these new-fangled upgrade plans, T-Mobile’s is the best deal. You can upgrade up to twice per year (though you don’t have to) and the cost per phone at minimum upgrade time is the least costly. You do still have to fork over a down payment up-front, and there’s a $10 monthly charge to enroll in Jump, but the less expensive data plans make up for that.
AT&T’s plan is the biggest rip-off. You have to complete 12 months worth of phone payments before you upgrade. Assuming you’re upgrading to the latest, most expensive smartphones, then you’ll end up paying for more than half of the phone, and well over the amount you’d have paid had you opted for a two-year contract. Verizon isn’t much better, considering you have to pay for half the cost of the phone to upgrade. Both carriers still charge their standard service plan rates.
Essentially, these plans are high-cost rental services that want to take advantage of your desire to be on top of the continuous, churning wheel of smartphone releases. The fact is: Most phones are still good after two years. They might not be the newest, fastest and shiniest, but they’re usually still working fine and capable of running the latest software. And of course, there’s the negative environmental impact of frequently upgrading your mobile devices to consider. Join these plans at your own risk and expense.
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