AT&T's play here seems to be to get people to pay for more data (10GB) than they would otherwise, and to further break the back of "unlimited" data plans and the subsidy model.
If there was any question of why mobile operators want to make your monthly bill all about data and kill "unlimited", this chart should clear that up:
Operators love having customers pay every month for capacity they don't use, and actively encourage the fear of throttling or draconian overage charges. In reality, most subscribers would be better paying for extra data only when they need it.
I don't follow. Under the subsidized plan one pays $235 for a new 16GB phone but in two years can sell that phone for at least that much meaning the cost of the phone is $0. Here one pays $162 + their old phone for a new phone every year vs $0 or even making a small "profit." (The math is similar for the higher storage models too).
So how is next better? It's smoke and mirrors. True, one doesn't get a new phone every year, but phones don't change that much year to year that it's a "must" upgrade situation.
Yeah if you don't get it waived, the upgrade fee is $35 + $200 for a phone for $235.
You use the phone for 2 years
After the 2 years your phone would be worth probably about $200 but it costs you $200 for your next phone w/ contract
Under the new plan, if my $162 / year difference is correct, of course it's not as cheap as the subsidized route.
But in my opinion the delta is not a lot, and given the option to upgrade every single year for $162 and never pay the upgrade fee, I just think that's cool.
When I purchased my current phone, it was just after AT&T announced the Next 18 plan, and I geeked out on the math a bit. While I only did individual and not Mobile Share plans, the fundamentals remain the same, so I'll post it here in case anyone cares to wade through it. One thing to note is that while there is no "activation" fee for the Next plans, you are responsible for any applicable sales tax on the full retail price of the device up front ($46.75 in my case). Also, they have a built-in buy back program at 12 or 18 months, and if you don't nail that window, you'll either be giving away your old device or paying a higher monthly bill than necessary. For instance, the Next 12 is hard to optimize unless you switch platforms or time your upgrades closer to mid release cycle.
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m = number of months on a given plan
b = number of days in the initial billing period
p = monthly cost of the plan
d = retail price of the device
s = subsidy amount
for smartphones, p starts at $60 ($40 plus data)
d = $649.99, $749.99, or $849.99 for current gen iPhone depending on NAND capacity
s = $450.00 for iPhones
Subsidy model:
Old
for m <= 3/b: m*p + 35
for 3/b < m <= 14/b: m*p + 36 + 35 = m*p + 71
for 14/b < m < 24: m*p + (d - s) + 36 + (325 - 10*⎣m⎦) = m*p + d - s + 361 - 10*⎣m⎦
for m >= 24: m*p + d - s + 36
New
for m <= 3/b: m*p + 35
for 3/b < m <= 14/b: m*p + 36 + 35 = m*p + 71
for 14/b < m < 24: m*p + (d - s) + 36 + (325 - 10*⎣m⎦) = m*p + d - s + 361 - 10*⎣m⎦
for m >= 24: m*p - 15*(m-24) + d - s + 36 = m*p - 15m + 360 + d - s + 36 = m*p - 15m + d - s + 396
New subsidy model is less expensive than old subsidy model where m > 24
Bring Your Own Device:
Old
m*p + d + 36
New
m*p - 15m + d + 36
New BYOD model is less expensive than old BYOD model where m > 0
Old BYOD model is less expensive than old subsidy model where s < 0
New BYOD model is less expensive than new subsidy model where s < 360
Next plan:
Old
for m <= 14/b: m*p + 35
for m > 14/b: m*p + d
New
for m <= 14/b: m*(p-15) + 35 = m*p - 15m + 35
for m > 14/b: m*(p-15) + d = m*p - 15m + d
New Next plan is less expensive than old Next plan where m > 0
Old Next plan is less expensive than old subsidy model where:
3/b < m <= 14/b and 0 < 36
14/b < m < 24 and s + 10*⎣m⎦ < 361 ⇒ s < 361
m >= 24 and s < 36
New Next plan is less expensive than new subsidy model where:
m <= 3/b and m > 0
3/b < m <= 14/b and m > -2.4
14/b < m < 24 and 15m > s + 10*⎣m⎦ - 361 ⇒ s < 366
m >= 24 and s < 396
Next plans are less expensive than BYOD plans where 0 < 36
New Next plan is less expensive than old subsidy model where:
m >= 24 and 15m > s - 36 ⇒ s < 396
m > 27.6 and s !> 450
r = rebate credit issued for device
Next 12:
for m <= 12: r = 8d/20 = 2d/5
for 12 < m < 20: r = (20 - ⎣m⎦)*d/20
for m >= 20: r = 0
0.40d >= r >= 0.05d
Next 18:
for m <= 18: r = 8d/26 = 4d/13
for 18 < m < 26: r = (26 - ⎣m⎦)*d/26
for m >= 26: r = 0
0.3077d >= r >= 0.0385d
Next 12 offers higher rebate where m < 16
Next 18 offers same or higher rebate where m >= 16