Following a strong backlash after the introduction of its AT&T Next smartphone upgrade program, AT&T has cut pricing on a number of devices in the program, including the iPhone.

Previously, the iPhone cost $32.50 per month under AT&T Next, making it more expensive than comparable plans from Verizon and T-Mobile. Now, however, the 16GB iPhone can be had for $27 per month -- one dollar per year cheaper than under a comparable Verizon plan.

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Through the program, customers end up double paying for their devices through both the new monthly handset payments and the portion of the monthly service charge that has traditionally been collected by the carrier to recoup its upfront handset subsidies. Assuming that $20 of AT&T's monthly service fees go toward recouping the carrier's handset subsidy, a customer looking to upgrade after 12 months would have paid $324 in device payments on a 16 GB iPhone 5 and $240 from monthly service fees, yielding total payments of $564 for the $650 device, although they also have to turn in the device to AT&T.

Verizon's Edge program appears to work in a similar manner, and now, for a similar price. Splitting the $650 iPhone cost over 24 months yields monthly payments of just over $27, and thus a customer looking to upgrade after 12 months would have paid $325 in device payments and $240 from monthly service fees, making for total payments of $565 plus the device trade-in.

Top Rated Comments

rneglia Avatar
143 months ago
The reason there hasn't been any comments on this yet is because everybody is still figuring out the math
Score: 20 Votes (Like | Disagree)
jayducharme Avatar
143 months ago
If the DoJ wants to investigate collusion, forget about books. Why aren't they turning their attention to the telecoms?

Oh, that's right -- there's competition: T-Mobile...
Score: 7 Votes (Like | Disagree)
darkslide29 Avatar
143 months ago
LOL. No thanks, AT&T!

Hurry, this 0.2% savings may not last long!
Score: 6 Votes (Like | Disagree)
alent1234 Avatar
143 months ago
If the DoJ wants to investigate collusion, forget about books. Why aren't they turning their attention to the telecoms?

Oh, that's right -- there's competition: T-Mobile...

t-mobile is not any cheaper once you figure in the price of the phone and the amount of LTE data you get
Score: 5 Votes (Like | Disagree)
Xgm541 Avatar
143 months ago
This is petty competition. $1 cheaper? Yes they can say they're cheaper but the consumer isnt really saving anything/
Score: 4 Votes (Like | Disagree)
tasset Avatar
143 months ago
Haha, Oh my these telcos are so repulsive. AT&T's bean counters must be patting themselves on the back for undercutting Verizon a whole dollar. Little Ralphie must be proud of their brand of "competition".
I personally have moved on to Tmobile and am not looking back. Separating device cost from service is the way to go.
Score: 3 Votes (Like | Disagree)

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