News by Andrew Kameka on Tuesday July 16, 2013.
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There's nothing better than seeing two companies compete to deliver better deals in order to attract consumers, and few industries are as desperately in need of competition as the wireless industry. In less than a week, we've seen AT&T and T-Mobile attempt to become the best carrier in the U.S. by leveraging their 4G LTE networks with consumer desire to get the best smartphones sooner than the two year waiting period carrier contracts require. Which is better?
T-Mobile was first to introduce its Jump program that allows subscribers to trade in their smartphones for something new every six months. It's designed to get rid of the "I Just Bought This!" fatigue that can occur when a phone is rendered obsoleted within weeks of purchase because something flashier and faster arrives. With Jump, customers who pay a monthly enrollment fee can upgrade their phone up to four times in a two-year span.
AT&T takes a slightly different route with the AT&T Next program. Next limits customers to an early upgrade once per year, so it's not as flexible as T-Mobile's Jump. However, it does let customers bypass the down payment of a smartphone and spread the cost of their device over 20 monthly installments. Once a customer has paid at least 12 installments, he or she can return the phone to AT&T and upgrade. Next will make it easier for someone who loves the Apple iPhone to not have to worry about paying full price to switch from an iPhone 4S to iPhone 5 to iPhone 5S and so on. As long as the customer pays his or her bills, the annual upgrade path will always be there.
So let's say that Apple fanboy or fangirl wants to sign-up and assure early upgrade paths; is AT&T or T-Mobile better from an economic standpoint. Putting aside 4G LTE coverage and network strength, which are obviously important but have too many variables across the U.S. to draw a definitive conclusion, let's take a look at the numbers?
|Device down payment||$0||$146|
|Monthly device payment||$32.50||$21|
|4GB+ Data monthly service||$110||$70|
|Monthly upgrade cost||$0||$10|
|Total Cost (12 months)||$1,710||$1,358|
It's important to note that AT&T Next does not include insurance payments and T-Mobile Jump combines insurance and membership into one fee. When combining cheaper monthly bills, a more flexible upgrade path, and more protection by including insurance costs in its trade-in program, it's clear that T-Mobile's Jump is the better buy. The drawback to using T-Mobile might be phone choice or network performance in a customer's local area, but with T-Mobile improving in many markets and most major phones being available across networks, T-Mobile might be the better option for cost-efficient frequent upgrades.
Andrew is based in Miami, Florida.