AT&T to Stop Offering Two-Year Phone Contracts Starting January 8

[ToroidalZeus]

It really will boil down to each individuals situation. For example:

5 Line family with unlimited data. Family uses 10 gigabytes combined (Remember, this is an example, as an individual situation... I use this example because it is the same exact way my cousin's family plan was).

700 Min Family Talk Plan, Unlim TXT, 5 lines w/ unlimited data, through att. 20% employer discount.

Family Talk 700 Plan

$60 ($48 after discount) - Talk for first line
$40 - Partner lines ($10 per)
$30 - Text
$30 ($24 after discount) - Data (x5 = $120)
---
$238 + Taxes/Fees

$271 after est. taxes and fees


Phones (Phones vary, for this purpose I'll use 64GB iPhone 6s' as examples since they got varying gb iPhones and I can't remember which ones)

$299 w/ 2yr + 5.5% sales tax (varies per state, obv) = $316.49 x 5 = 1582.45
$45 Renewal fee x 5 = $225

Total One Time Fees = $1807.45, or $75.31 per month if spread over 24 months

$271 (service) + $75.31 (equipment monthly from 1 time costs) = $346.31

(Add an estimated $28.5 after taxes/fees per month after unlimited data plan increase, and you'll get to $374.81 per month)


---------------

Mobile Share Value 15gb Plan


$100 ($80 after discount) - Talk/Text/Data plan
$75 line fees ($15 out of contract per)
-----
$155 + Taxes/Fees

$176.7 after est taxes and fees


Phones(Phones vary, for this purpose I'll use 64GB iPhone 6s' as examples since they got varying gb iPhones and I can't remember which ones)

$749.99 over 24 months (Next 18) = $31.25/mo x 5 = $156.25
$15 Renewal fee x 5 = $75
$41.25 5.5% sales tax (varies per state, obv) x 5 = $206.25

Total One Time Fees = $206.25 taxes + $75 upgrade fees = $281.25

One time fees spread over 24 months to match 700 min plan for fairness = $11.72 /month

Total Monthly phone fees from above = $156.25


$176.7 service fees + $156.25 phone fees = $332.95 /month
Add $11.72 from one time fees and you get = $344.67


---

Conclusion and notes:

700 Min Plan BEFORE unlim price increase = $346.31
700 Min Plan AFTER unlim price increase = $374.81
15gb Mobile Share value w/ Next 18 = $344.67


Now a couple things

If the family on the 700 min plan DOES NOT (Did not) upgrade every 2 years, the bill stayed at the original service fees of $271 per month, no matter what. With a mobile share value plan, the plan has the chance to go all the way down to $156.25 service fees because the phones are paid off. There are a lot of people who DIDN'T upgrade exactly every two years. Families like to do hand me downs, people keep phones for longer because they still work, waiting for whatever random new phone to be released etc etc. So this is just an example, and this is an example used from my cousin's family plan. In any case, they come out a few bucks ahead every month over the course of 24 months with the 15gb MSV, and more than a few bucks ahead after the unlimited price increase. They don't use more than 10gb a month, so for THEM this worked. Not all families work out like this. Not all families have employer discounts (in which case the MSV works out even better in situations like this).


Bottom line, is every single customer needs to do what is right for them, not what is right for some random someone on Macrumors forums.

I see 2 issues with your math.

First you forgot to factor in the resale value of iPhones.
Second you have a $2 per month price difference between 700min before and 15GB family. In other words you are within a margin of error, esp because you are estimating plan taxes. So I wouldn't say, "they are a few bucks ahead," but a "wash" instead, maybe because it could actually be slightly more or slightly less and even then it's slightly tricky.

Because going from unlimited to 15GB means if any of their usage habits change, then suddenly they could be right at that limit. So they are giving up future-proofing.

Also with that said, if that family is only using 10GB combined, then you could convert some of the lines to 2GB or maybe even 200 MB service. As which point the cost would drop to a point where it is definitely cheaper. Plus it would avoid the $5 unlimited rate increase.

 

[Oridus]

I see 2 issues with your math.

First you forgot to factor in the resale value of iPhones.
Second you have a $2 per month price difference between 700min before and 15GB family. In other words you are within a margin of error, esp because you are estimating plan taxes. So I wouldn't say, "they are a few bucks ahead," but a "wash" instead, maybe because it could actually be slightly more or slightly less and even then it's slightly tricky.

Because going from unlimited to 15GB means if any of their usage habits change, then suddenly they could be right at that limit. So they are giving up future-proofing.

Also with that said, if that family is only using 10GB combined, then you could convert some of the lines to 2GB or maybe even 200 MB service. As which point the cost would drop to a point where it is definitely cheaper. Plus it would avoid the $5 unlimited rate increase.

This last statement,

Also with that said, if that family is only using 10GB combined, then you could convert some of the lines to 2GB or maybe even 200 MB service. As which point the cost would drop to a point where it is definitely cheaper. Plus it would avoid the $5 unlimited rate increase.

is kind of contradictory to your statement of usage habits changing.

That's also why I said it depends on the family.

Also, resale factor is just another high variable. Not everybody knows, nor wants to sell their old phones. Not everybody has a phone in good condition to sell.

Also, in my math, I applied the same % of estimated taxes and fees (14%) on both occasions. The margin of error would impact both the same way depending on what the actual tax % was for a particular billing cycle.

Also. This particular family has 3 people who upgrade every 3+ years... and hang on to their phones as long as possible. Which is 12+ months they aren't paying an installment for their phone, in which case their price per month decreases for that time period.

 

[ToroidalZeus]

This last statement, is kind of contradictory to your statement of usage habits changing.

Yes it's contradictory to keeping unlimited data. However it's more accurate of an Apples to Apples comparison because then you are comparing limited data (2gb or 200 mb per line) vs limited data (15gb family plan). As-is you are saying that they will save $1.64 a month (which like I said is already in a margin of error) but that's an optional expense for the value of future-proofing their data usage.

Also, resale factor is just another high variable. Not everybody knows, nor wants to sell their old phones. Not everybody has a phone in good condition to sell.

Resale value is really stable for iPhones. Base model in working condition can always be sold for at least $200 2 years later. This is based on personal exp of selling iPhones every year for the last 6 years.

Also, in my math, I applied the same % of estimated taxes and fees (14%) on both occasions. The margin of error would impact both the same way depending on what the actual tax % was for a particular billing cycle.

The taxes and fees aren't all % like sales tax tho.

Also. This particular family has 3 people who upgrade every 3+ years... and hang on to their phones as long as possible. Which is 12+ months they aren't paying an installment for their phone, in which case their price per month decreases for that time period.

Ya obviously people that don't upgrade on time will pay more but it doesn't change that the old way, when upgraded on time, is still a better deal.

I don't want to add too many variables, but there is also an added value of upgrading your iPhone on time in that it resets your warranty.

 

[Leonard1818]

If you only knew how many contracts, phones, carriers and plans I deal with in any given week. LOL.

But that's okay. You have some "special" time/space warp that nobody else lives in that makes math rules bend a different way for you. More power to you.

BTW: I never said that getting a phone off contract is "so much cheaper." What I said, which is true is that there was never, ever any such thing as a "subsidized" phone. Period. You always, always, always paid for the phone. You just did it in a bundled and non-transparent way that, in almost all cases costs more in the long run.

And yeah, we're done here.

Oh boy! A little back-walk I see...

Actually, what you said was: "you're bad at math". Period. A remark meant solely to antagonize. You were referred to in the company of such mythical creatures that live under bridges and antagonize on the internet and asked to prove your point with numbers. To which you replied something about a $25 savings per month (but no math, good or bad, to show where that came from) AND tried to blackmail me with threats of tattling to the moderators that you were called a name on the internets (classy). Now you're going to wow us with your expertise given "how many contracts, phones, carriers and plans" you deal with in a week -- (a weak argument at best. I'm an astronaut cowboy that hunts aliens. See how that works?). Finally, the retraction.... "well, uh, I never said the words 'so much cheaper', I, uh, just spent however long trying to convince you that you're wrong...but now only slightly....and, uh, something something subsidy isn't real, yeah, that's my point! All along!"

Whatever man. You're an internet hero today. Gold star for you!, Now remember as we move forward, nobody likes a tattle-tale so try to not be so offended by strangers on the internet.

 

[Adelphos33]

I'm sure this has been mentioned before, but isn't this simply a stealth price increase?

Before, AT&T let you pay $200 for a $650 phone. The $450 "subsidy" was then theoretically reflected in a higher per month cost across the life of the two year contract. However, as everyone has pointed out, this "subsidy" was never broken out in the phone bill and wasn't removed once the contract ran out.

Now, all AT&T is doing is making you pay the full $650 price as an installment on your phone bill. However, they aren't reducing your phone bill cost by the $450 subsidy! They are instead increasing your phone bill by $450 over the time frame your choose! Maybe you can get some discounts by adding family share plans and what not, but all in, most customers are going to be ending up paying more to AT&T!

 

[Kendo]

Called customer retention and they gave me a $199 iPhone 6s (that I upgraded to 64GB for $299) and they waived the activation fee. They will also unlock my current iPhone 6 when they do away with the contracts in a few days (so I get to sell that immediately).

When they do away with contracts in a few days, will my iPhone 6s be eligible to unlock since there are no more contracts?

 

[weatherwax]

I'm sure this has been mentioned before, but isn't this simply a stealth price increase?

Yes. Absolutely yes.

 

[ToroidalZeus]

Called customer retention and they gave me a $199 iPhone 6s (that I upgraded to 64GB for $299) and they waived the activation fee. They will also unlock my current iPhone 6 when they do away with the contracts in a few days (so I get to sell that immediately).

When they do away with contracts in a few days, will my iPhone 6s be eligible to unlock since there are no more contracts?

If you bought your iPhone 6 at launch then you can probably already unlock it through the online portal. In my exp, iPhones become eligible for unlock by the 1 year mark even when they are on contract.

 

[Kendo]

If you bought your iPhone 6 at launch then you can probably already unlock it through the online portal. In my exp, iPhones become eligible for unlock by the 1 year mark even when they are on contract.

I'm more worried about the iPhone 6s unlock. If I started a two year contract today, and they do away with 2 year contracts, what happens to my 6s in a few days?

 

[ToroidalZeus]

I'm more worried about the iPhone 6s unlock. If I started a two year contract today, and they do away with 2 year contracts, what happens to my 6s in a few days?

most likely nothing. You'll need to purchase an unlock from the a 3rd party co for the 6S.

 

[Smin]

I'm sure this has been mentioned before, but isn't this simply a stealth price increase?

Before, AT&T let you pay $200 for a $650 phone. The $450 "subsidy" was then theoretically reflected in a higher per month cost across the life of the two year contract. However, as everyone has pointed out, this "subsidy" was never broken out in the phone bill and wasn't removed once the contract ran out.

Now, all AT&T is doing is making you pay the full $650 price as an installment on your phone bill. However, they aren't reducing your phone bill cost by the $450 subsidy! They are instead increasing your phone bill by $450 over the time frame your choose! Maybe you can get some discounts by adding family share plans and what not, but all in, most customers are going to be ending up paying more to AT&T!

I've never understood this either but I agree with you.. Man I hate AT&T so much..

 

[Rigby]

Before, AT&T let you pay $200 for a $650 phone. The $450 "subsidy" was then theoretically reflected in a higher per month cost across the life of the two year contract. However, as everyone has pointed out, this "subsidy" was never broken out in the phone bill and wasn't removed once the contract ran out.

Now, all AT&T is doing is making you pay the full $650 price as an installment on your phone bill. However, they aren't reducing your phone bill cost by the $450 subsidy!

That is true if you are on one of the old legacy plans. But on the Mobile Share plans they do reduce your bill if you bring your own phone or buy one via Next instead of getting it subsidized through a 2-year commitment.

For comparisons there are also some other variables to consider. The Mobile Share plans include unlimited talk and text and mobile hotspot, while they cost extra with the legacy plans. You also have the option of getting the phone unlocked at any time by buying outright or paying off your Next installments (good for people who travel internationally and use local SIMs), whereas on subsidy you had to wait until the contract was up. These things may or may not matter to you, but they need to be considered for an informed decision.

 

[anek007]

I'm sure this has been mentioned before, but isn't this simply a stealth price increase?

Before, AT&T let you pay $200 for a $650 phone. The $450 "subsidy" was then theoretically reflected in a higher per month cost across the life of the two year contract. However, as everyone has pointed out, this "subsidy" was never broken out in the phone bill and wasn't removed once the contract ran out.

Now, all AT&T is doing is making you pay the full $650 price as an installment on your phone bill. However, they aren't reducing your phone bill cost by the $450 subsidy! They are instead increasing your phone bill by $450 over the time frame your choose! Maybe you can get some discounts by adding family share plans and what not, but all in, most customers are going to be ending up paying more to AT&T!

Most people now of days don't benefit or understand this 2 year contract because of all the new service plans. The $450 discount was real. There's still a lot of people with a single line with unlimited data plan paying just $75.

I have two smartphones and two dumb phones and paying $150. I'm affected by this as well. Att has been offering shared upgrade for years. I can buy 4 smartphones for a two year contact. Pay $800 for 4 smart phones and sell 2 for profit. 2 years later I buy another 4 smartphone, sell the two old phones, sell two new phones, and get two free new updated phones. End of the day I'm still paying $150 a month. With the new mobile share plan for a 15gb is $100 plus 4 phones is 160 and I have to pay full price of $1300 to two updated smartphones.

This move is just to get rid of those customers that are hanging on to the family talk plan and unlimited. Like any company att just wants more profit. They don't care about loyal customers that been with them for +10 years. Money, Greed, Profit. Right now they could care less about legacy customers. Att is getting about 5% growth in new subscribers.

 

[Rigby]

This move is just to get rid of those customers that are hanging on to the family talk plan and unlimited. Like any company att just wants more profit. They don't care about loyal customers that been with them for +10 years.

If they didn't care, they could have stopped renewing the grandfathered unlimited data plans years ago.

 

[JayLenochiniMac]

If they didn't care, they could have stopped renewing the grandfathered unlimited data plans years ago.

They did care before, but not anymore now that the vast majority of their current customers have moved off unlimited and/or two-year contracts and so their bottom line won't get too hurt. It's simply a business decision.

 

[Phillyphil0302]

Chatted with att today regarding the 2 year contracts ending on the 8th and without me even asking, agent asked me if I wanted to upgrade my iPhone 6 to a 6s or 6s+...long story short, ended up upgrading to a 64GB 6s for $299...bought my 6 on launch day so I wasn't eligible for an upgrade. Mind you, I didn't even ask for my eligibility date to be moved up...rep ASKED me if I wanted an upgrade!?!? Go figure...how much can I get for a brand new, in the box space gray 64GB iPhone 6s?

 

[tigres]

Go ahead. The carrier's shareholders will love you for it.

Why is that?
Because they are paying 500 for my phone to apple, with my bill remaining the same as it was nearly 7 years ago?

Sounds good to me.

 

[anek007]

If they didn't care, they could have stopped renewing the grandfathered unlimited data plans years ago.

Give it about a year or so. The way things are going it will end eventually. I'm surprise how fast they went from offering 2 year contact to att only to completely ending it. Att wasn't happy when the fcc stepping in about their unlimited being throttled. They will find a way to get rid of unlimited.

 

[ToroidalZeus]

Chatted with att today regarding the 2 year contracts ending on the 8th and without me even asking, agent asked me if I wanted to upgrade my iPhone 6 to a 6s or 6s+...long story short, ended up upgrading to a 64GB 6s for $299...bought my 6 on launch day so I wasn't eligible for an upgrade. Mind you, I didn't even ask for my eligibility date to be moved up...rep ASKED me if I wanted an upgrade!?!? Go figure...how much can I get for a brand new, in the box space gray 64GB iPhone 6s?

You should sell the iPhone 6. 2 Reasons. 1) 6S will be locked to AT&T unless you pay ~$50 to unlock it while the 6 will unlock through AT&T online portal. 2) 6S has Band 30 support which will mean better service. It's more future proof.

Best case I would say you can sell the 64GB 6S for $750 aka MSRP - Tax on Craigslist.

 

[Rigby]

They did care before, but not anymore now that the vast majority of their current customers have moved off unlimited and/or two-year contracts and so their bottom line won't get too hurt.

In the eyes of this forum, they are damned if they do and damned if they don't. I just find it amusing how people who are still grandfathered on plans that AT&T stopped offering half a decade ago complain the loudest about them "not caring for loyal customers".

 

[Phillyphil0302]

You should sell the iPhone 6. 2 Reasons. 1) 6S will be locked to AT&T unless you pay ~$50 to unlock it while the 6 will unlock through AT&T online portal. 2) 6S has Band 30 support which will mean better service. It's more future proof.

Best case I would say you can sell the 64GB 6S for $750 aka MSRP - Tax on Craigslist.

You're right about that...I wasn't thinking straight because I was so mesmerized by att's voluntary generosity lol
So how much do you think I could get for a mint condition, 64GB, space gray iPhone 6? Btw, I had it unlocked about 5 months ago using my iPad number

 

[anek007]

You're right about that...I wasn't thinking straight because I was so mesmerized by att's voluntary generosity lol
So how much do you think I could get for a mint condition, 64GB, space gray iPhone 6? Btw, I had it unlocked about 5 months ago using my iPad number

Did u pay for activation fee? Some people posted that they got their fee waived. I'm trying figure out what to say for them to wait the fees.

 

[Phillyphil0302]

Did u pay for activation fee? Some people posted that they got their fee waived. I'm trying figure out what to say for them to wait the fees.

I've always had that bogus fee waived every time I upgraded my iPhone...wait till it shows up on your bill and call/chat with att and have it waived/credited. In my past experience, online chat is the way to go

 

[ToroidalZeus]

You're right about that...I wasn't thinking straight because I was so mesmerized by att's voluntary generosity lol
So how much do you think I could get for a mint condition, 64GB, space gray iPhone 6? Btw, I had it unlocked about 5 months ago using my iPad number

It looks like the going rate on craigslist is $450-500.

 

[Phillyphil0302]

It looks like the going rate on craigslist is $450-500.

Cool, thanks...never sold any of my previous iPhones before. Usually gave'em away to family and friends when upgrading but now that contract pricing is going away, I may just start selling it to recoup some cost