After some initial confusion, iLounge received clarification from AT&T regarding the possibility of replacing your current iPhone with a 16GB one.
Mark Siegel, Executive Director of Media and Analyst Relations with AT&T, told iLounge in an email, If you upgrade from an 8 to a 16 GB iPhone, you sign a new contract. However, we automatically backdate it to the starting point of your contract on the 8 GB phone. He added that the company will make every effort to ensure that our reps provide customers with the correct information, and clarified that customers should activate the SIM card that comes with the new model.
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