AT&T Next.......ripoff

Scholar

AT&T Next.......ripoff

Message 1 of 16
ACE - Expert

Re: AT&T Next.......ripoff

Yes, but nobody is forcing Next on you. It's an option for those who like to be ripped off, just like paying for messaging. So don't get Next… and don't get ripped off. Problem solved.
*The views and opinions expressed on this forum are purely my own. Any product claim, statistic, quote, or other representation about a product or service should be verified with the manufacturer, provider, or party.
Message 2 of 16
Scholar

Re: AT&T Next.......ripoff

Just informing the customers dude. Move along.
Message 3 of 16
Explorer

Re: AT&T Next.......ripoff

People have this clue, likely arent going to jump at what they call a deal unless the company makes some changes.
Message 4 of 16
Scholar

Re: AT&T Next.......ripoff

To bad there are many people that lack knowledge
Message 5 of 16
Professor

Re: AT&T Next.......ripoff

The logic of the article is faulty.  The customer can't opt out of the "unknown" $20 subsidy that is supposedly rolled into their monthly service charges. So you would never be able to use that money for buying an unsubsidized device (for full retail price).  There is no way to avoid this fee, it gets charged whether you upgrade every year, every 2 years, or never at all, for that matter.  Yes, that nebulous $20 amount does equate to profits for AT&T in the way the author suggests.  But it doesn't really factor in for the customer.  It would only factor in, if the customer had some means to opt out of this fee (and give up the right to buy at the subsidized price).  It would be cool if we had that choice.  But we don't.

 

So the cost of upgrading a phone under Next is $32 x 12 = $384, plus the subsidized price.  For the Galaxy S4 (a pretty reprentative example of the price for a "flagship" smartphone for the past few years) the subsidized price is $199.  So under next, your cost would be $584.  Paying full retail would be $650.  So you end up saving a little, but you have to commit to the monthly installments.  So for many people, its just not worth it to save $65 or so, and give up the freedom of buying a phone whenever you want, buying an unlocked phone from a 3rd party, etc.  So yes, I agree that $32 a month is too much.  And it doesn't compare to what T-Mobile is offering.  But its not a huge ripoff versus the existing AT&T model (upgrading every 2 years).

Message 6 of 16

Re: AT&T Next.......ripoff


redpoint73 wrote:

The logic of the article is faulty.  The customer can't opt out of the "unknown" $20 subsidy that is supposedly rolled into their monthly service charges. So you would never be able to use that money for buying an unsubsidized device (for full retail price).  There is no way to avoid this fee, it gets charged whether you upgrade every year, every 2 years, or never at all, for that matter.  Yes, that nebulous $20 amount does equate to profits for AT&T in the way the author suggests.  But it doesn't really factor in for the customer.  It would only factor in, if the customer had some means to opt out of this fee (and give up the right to buy at the subsidized price).  It would be cool if we had that choice.  But we don't.

 

So the cost of upgrading a phone under Next is $32 x 12 = $384, plus the subsidized price.  For the Galaxy S4 (a pretty reprentative example of the price for a "flagship" smartphone for the past few years) the subsidized price is $199.  So under next, your cost would be $584.  Paying full retail would be $650.  So you end up saving a little, but you have to commit to the monthly installments.  So for many people, its just not worth it to save $65 or so, and give up the freedom of buying a phone whenever you want, buying an unlocked phone from a 3rd party, etc.  So yes, I agree that $32 a month is too much.  And it doesn't compare to what T-Mobile is offering.  But its not a huge ripoff versus the existing AT&T model (upgrading every 2 years).


One thing that is common with both Next and Jump is that the consumer DOES NOT end up owning the phone after making those payments.  That is where the carriers make the money.  And yes, there is a "soft cost" associated with subsidies but that figure is unknown.  The $20/month is just a guesstimate.

~~~~~~~~~~~~~~~
Samsung Galaxy Note 3
Prev. devices: SGS, Note 2, SGS3, Galaxy Nexus, T-Mobile, G2x, iPhone4, HTC HD2, HTC Fuze, HTC StarTrek, BB Bold
Message 7 of 16
Guru

Re: AT&T Next.......ripoff


redpoint73 wrote:

So under next, your cost would be $584.  Paying full retail would be $650.  So you end up saving a little, but you have to commit to the monthly installments.  So for many people, its just not worth it to save $65 or so, and give up the freedom of buying a phone whenever you want, buying an unlocked phone from a 3rd party, etc.  So yes, I agree that $32 a month is too much.  And it doesn't compare to what T-Mobile is offering.  But its not a huge ripoff versus the existing AT&T model (upgrading every 2 years).



Here's the problem with that, though. In order to upgrade under Next, the customer must turn in his/her existing handset to AT&T. If a person buys a phone outright, there's a good chance that he/she can sell it a year later and use the money to subsidize the purchase of a new phone. For example, I recently purchased the GS4 Google Edition and will be selling my GS3, which is still worth around $300 on eBay. Effectively, it covers around 45% of the GS4's cost. Next takes that option away.

Message 8 of 16
Professor

Re: AT&T Next.......ripoff


kgbkny wrote:


Here's the problem with that, though. In order to upgrade under Next, the customer must turn in his/her existing handset to AT&T.

That's true, but I've never sold any of my old phones.  I upgrade every 1-2 years (1.5 years is probably average for me) and I tend to keep my last phone as a backup, in case I lose or break my phone.  So by the time that phone comes off "backup" duty, its too old to get any decent resale value.  But of course, this is just my own practice/preference.

 

My main beef with the article in the OP, is that I've seen this reasoning several times before (not just with this Next feature, but subsidized devices from US carriers in general) how the subsidy supposedly makes you phone "cost" much more than if you just bought it full retail or an unlocked device from a 3rd party vendor.  While in some respects this is true (profit on the carriers side), there is no way for the customer to "save" this money.  Its sunk funds, whether you use the upgrade or not.  At least under the present subsidy model (no way to opt out of the subsidy cost).

 

 

Message 9 of 16
Guru

Re: AT&T Next.......ripoff


redpoint73 wrote:

That's true, but I've never sold any of my old phones.  I upgrade every 1-2 years (1.5 years is probably average for me) and I tend to keep my last phone as a backup, in case I lose or break my phone.  So by the time that phone comes off "backup" duty, its too old to get any decent resale value.  But of course, this is just my own practice/preference.

 

My main beef with the article in the OP, is that I've seen this reasoning several times before (not just with this Next feature, but subsidized devices from US carriers in general) how the subsidy supposedly makes you phone "cost" much more than if you just bought it full retail or an unlocked device from a 3rd party vendor.  While in some respects this is true (profit on the carriers side), there is no way for the customer to "save" this money.  Its sunk funds, whether you use the upgrade or not.  At least under the present subsidy model (no way to opt out of the subsidy cost).


I tend to upgrade every 12 months or so, give or take a couple of months. I take good care of my devices (case and screen protector from day one), as I always sell them to help subsidize the purchase of my next device. It's definitely a good idea to keep a backup device and my old T-Mobile G1 (yes, the G1) serves that purpose. I never actually needed a backup phone, but that certainly doesn't mean I won't need one in the future.
There's anecdotal evidence that carriers have approximately $20 built into the monthly payment to cover the subsidy. The only exception to that rule is T-Mobile, which is not a viable option in my area. I live in NYC and the service in my neighborhood is attrocious. Verizon and AT&T both offer excellent service, but I won't consider Verizon, due to the fact that they are CDMA. Subsidy or not, AT&T is my only choice.

 

Message 10 of 16
Scholar

Re: AT&T Next.......ripoff

Didn't T-mobile lower the service/plan pricing for Jump customers though- presumably by eliminating the built-in subsidy cost that the customers are not using?

When comparing AT&T to T-mobile then, yes the customer is facing an "opportunity cost" with AT&T that they would not face if they had gone with T-mobile.

I think if AT&T wants to retain urban-center customers (where T-mobile historically has comparable coverage), then they will have to follow a similar model and drop the plan/service pricing a little for the Next opt-in customers.
Message 11 of 16
Professor

Re: AT&T Next.......ripoff


s.m.knipe wrote:
Didn't T-mobile lower the service/plan pricing for Jump customers though- presumably by eliminating the built-in subsidy cost that the customers are not using?

When comparing AT&T to T-mobile then, yes the customer is facing an "opportunity cost" with AT&T that they would not face if they had gone with T-mobile.

I think if AT&T wants to retain urban-center customers (where T-mobile historically has comparable coverage), then they will have to follow a similar model and drop the plan/service pricing a little for the Next opt-in customers.

Jump T-Mobile customers pay the same monthly rate that non-Jump (Simple Choice) T-Mobile customers pay.  There was a $20 difference when the Value and the Classic plans (and their predecessors) were offered.  Or, there is a $20 difference between what the customers who upgrade through T-Mobile directly pay and those who use the authorized resellers (Costco, Walmart, etc.) pay now.

Message 12 of 16
Professor

Re: AT&T Next.......ripoff


redpoint73 wrote:

The logic of the article is faulty.  The customer can't opt out of the "unknown" $20 subsidy that is supposedly rolled into their monthly service charges. So you would never be able to use that money for buying an unsubsidized device (for full retail price).  There is no way to avoid this fee, it gets charged whether you upgrade every year, every 2 years, or never at all, for that matter.  Yes, that nebulous $20 amount does equate to profits for AT&T in the way the author suggests.  But it doesn't really factor in for the customer.  It would only factor in, if the customer had some means to opt out of this fee (and give up the right to buy at the subsidized price).  It would be cool if we had that choice.  But we don't.

 

So the cost of upgrading a phone under Next is $32 x 12 = $384, plus the subsidized price.  For the Galaxy S4 (a pretty reprentative example of the price for a "flagship" smartphone for the past few years) the subsidized price is $199.  So under next, your cost would be $584.  Paying full retail would be $650.  So you end up saving a little, but you have to commit to the monthly installments.  So for many people, its just not worth it to save $65 or so, and give up the freedom of buying a phone whenever you want, buying an unlocked phone from a 3rd party, etc.  So yes, I agree that $32 a month is too much.  And it doesn't compare to what T-Mobile is offering.  But its not a huge ripoff versus the existing AT&T model (upgrading every 2 years).


Under Next, the customer doesn't pay the subsidized price for the device.  So it will be a difference of $640-384=$256.  The $256 balance is forgiven if the device is given back to AT&T in good condition.  If someone can sell it after a year for more than $256, there is a loss.  But, the SGS4 may not have much more in resale value after a year has gone by, especially if the customer didn't get the device as soon as it was released.

Message 13 of 16
Tutor

Re: AT&T Next.......ripoff BAIT and SWITCH

ATT sales rep lied, creatively, to sell NEXT.  His answer to the simple, straightforward question "Will this change my monthy bill?" was "It will be exactly what it was before".  At no time did he make it clear that we were looking at 20 months of $27 per month, nor that we would not own the phone at the end of the period.  When approached later, after the bill came in, the store manager simply said that his representatives were clear and that, since the 14 day remorse period had expired, we would do nothing for us about getting out of NEXT.  Our NEXT step is filing with the BBB, [Per Guidelines:  Keep it Relevant and Appropriate]..  Are you listening, AT&T?

Message 14 of 16
ACE - Guru

Re: AT&T Next.......ripoff BAIT and SWITCH


kittennis wrote:

ATT sales rep lied, creatively, to sell NEXT.  His answer to the simple, straightforward question "Will this change my monthy bill?" was "It will be exactly what it was before".  At no time did he make it clear that we were looking at 20 months of $27 per month, nor that we would not own the phone at the end of the period.  When approached later, after the bill came in, the store manager simply said that his representatives were clear and that, since the 14 day remorse period had expired, we would do nothing for us about getting out of NEXT.  Our NEXT step is filing with the BBB, [Per Guidelines:  Keep it Relevant and Appropriate]..  Are you listening, AT&T?


Is this at AT&T Corperate Store or authorized dealer? I see Next can only be done at AT&T Corperate Store. If I'm not mistaken, for Next, you suppose to sign a installment agreement to pay for the device over 20 monthly payments. Or did you sign anything at all?

*The views and opinions expressed on this forum are purely my own. Any product claim, statistic, quote, or other representation about a product or service should be verified with the manufacturer, provider, or party.
Message 15 of 16
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