ATT Next - more expensive then subsidy.

Discussion in 'iPhone' started by maflynn, Oct 12, 2014.

  1. maflynn Moderator

    maflynn

    Staff Member

    Joined:
    May 3, 2009
    Location:
    Boston
    #1
    I jumped over from the VZW to ATT, in part to save money.

    The salesman was pushing hard to get me to join the NEXT program to save money but after running the numbers at home, it was the opposite. I know in a number of situations it can save money but in my case that's not what happened.

    I have 2 lines, and a 6GB data plan.
    So if I bought 2 iPhone 6 pluses, that would run me 36 dollars each or 70 dollars for both. Add in the 80 dollars for data plan and 25 each(40 less the discount) for the call plan and I'm looking at 202 a month.

    For the subsidy plan, I'm paying 80 for the data and 40 for each phone or 160. So the Next plan would cost me 42 dollars a month more.

    Am I missing anything?
     
  2. Hal~9000, Oct 12, 2014
    Last edited: Oct 12, 2014

    Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #2
    If you go subsidy route then you probably want to factor in the cost of the down payment on the phones + upgrade fees over 24 months.

    I assume you are going with two iPhone 6+'s at $850 each, since you said a Next monthly cost of $36/mo, so after subsidy you will pay $400 each and $40 each for the upgrade fee.

    $400 + $400 + $40 + $40 = $880/24 months = $37/month average added to the $160 a month for the subsidized route (A total of $197/mo).

    Of course some will say you can get the upgrade fee's waived which would throw off the math above, so YMMV just wanted to do the math for the average customer.

    P.S. if you did only want to average around $160/mo, then ATT owned Cricket Wireless might be a good option. They have a $45/mo (no taxes or fees) plan with unlimited talk/text + 3GB of LTE data before throttle. If you averaged the monthly cost it would be:
    $36/mo for iPhone 6+ #1 ($850/24)
    $36/mo for iPhone 6+ #2 ($850/24)
    $45/mo for Cricket line #1
    $45/mo for Cricket line #2
    -------------------------------------------------------
    Total of $162 per month average over 24 months.
     
  3. zbarvian macrumors 68010

    Joined:
    Jul 23, 2011
    #3
    Well, if you consider the upfront cost of buying two subsidized Plus's, with the additional activation fee of $40, you're looking at about $700 for that route. Over the course of +$42 a month, you'd be basically even until 15 months in. If you keep the phones for 2 years, the savings will likely be equivalent because after 20 months you no longer have monthly installments. You're paying a little more for the option of upgrading early, and paying the same or less if you don't.
     
  4. maflynn thread starter Moderator

    maflynn

    Staff Member

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    May 3, 2009
    Location:
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    #4
    If I add in the cost of the 2 iPhones (400 each under the subsidy) with the total 2 year cost of the contract that gets me to the following figure.

    160 x 24 months = 3,840 plus 800 is 4640 total cost under subsidy.

    Next:
    80 (data) + 72 (Next 2 phones ) + 50 (cell plan discounted x 2) = 202
    202 x 24 months = 4848

    So even with considering the initial purchase price, the cost of owning under the subsidy is less then Next, or is my math wrong?
     
  5. Hal~9000 macrumors 68000

    Hal~9000

    Joined:
    Sep 13, 2014
    #5
    You are correct in that NEXT is more expensive, it really is designed to be in order to protect AT&T's profits.

    I would also add $80 for two upgrade fees with the subsidized plan, for a total of $4,720 (unless you plan to get them waived). So over a two year period NEXT is $128 more expensive than going the subsidized route.
     
  6. normanfox macrumors 6502a

    Joined:
    Feb 9, 2014
    #6
    in my case, sub is much cheaper than Next. There is a reason why AT&T is promoting Next so badly.
     

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  7. maflynn thread starter Moderator

    maflynn

    Staff Member

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    #7
    I forgot about the activation costs, but you're right that closes the gap a little. I'm going to see if I can get that waived tomorrow, via online chat.
     
  8. aristobrat macrumors G5

    Joined:
    Oct 14, 2005
    #8
    IMO, Next is usually only cheaper than 2-year contracts when used on 10GB+ plans.
     
  9. 617aircav Suspended

    Joined:
    Jul 2, 2012
    #9

    But you are forced to pay more to get that 10gb if you don't need it.
     
  10. 617aircav Suspended

    Joined:
    Jul 2, 2012
    #10
    This is the updated next. The original next was an actual robbery in progress. On the original next your were paying twice for the phone as ATT knew that some people were too stupid to realize this.
     
  11. alent1234 macrumors 603

    Joined:
    Jun 19, 2009
    #11

    not if you have 4 or more people on the account
     
  12. Lylyluvda916, Oct 12, 2014
    Last edited: Oct 12, 2014

    Lylyluvda916 macrumors regular

    Joined:
    Aug 28, 2012
    #12
    Next and simular plans appear to benefit family plans with the 10gb or more mobile data share plans.

    For me:
    Two year option:
    10 gb Data: $100
    Line 1: $40 line that I would have gotten iphone 6 plus for
    Line 2: $15
    Line 3: $15
    Line 4: $15
    Ipad: $ 10
    iPad next: $31.50
    Work discount: 17% or $17

    monthly: $209.50*24=about $5,028 due the taxes and gov fees.

    $5,028 + $40 upgrade fee + $399+$79=$5,546

    In Next:
    10gb Data: $100
    Line 1: $15
    Line 2: $15
    Line 3: $15
    Line 4: $15
    iPad: $10
    iPad next: $31.50
    Iphone next: $35.38
    Work discount: 17% or $17.00

    Monthly: $218.88*24=about $5,252.12 due to taxes and gov fees

    $5,252.12 + $79 = $5,332.12

    $5,546 - $5,332.12 = $214 difference

    Not to mention I keep paying $15 instead of $40.

    I plan on paying the phone fully within a year even though I have next 20 which allows me to pay the phone over two years. I'm doing this so I can unlock it once it's fully paid off and sell it so that I can buy the next generation fully unlicked and say good buy to contracts and go with something much cheaper. I'm hoping t-mobile will up the coverage in my area. Looks promising but until then I have only one line in contract for another year. Enough time to pay the two devices off and let that line finish. :))
     
  13. viewfly macrumors 65816

    viewfly

    Joined:
    May 1, 2009
    #13
    With the subsidy you keep paying each moth a surcharge for the phones, on the data plan, after its paid off. With Next it is an interest free loan.

    Next is cheaper.
     
  14. EDH667 macrumors 6502a

    EDH667

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    Nov 25, 2009
    Location:
    Northern California
    #14
    On contract, after the 24 months that surcharge goes away. Next is only cheaper on the 10 GB or higher mobile share plans.
     
  15. ucfgrad93 macrumors P6

    ucfgrad93

    Joined:
    Aug 17, 2007
    Location:
    Colorado
    #15
    I signed up for NEXT several months ago. I have 4 smartphones on a family plan, and my monthly charge dropped by $100/month when I made the switch. So far, we haven't upgraded any phones yet although I'm strongly considering getting either the Note 4 or the 6+.
     
  16. McGiord macrumors 601

    McGiord

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    Oct 5, 2003
    Location:
    Dark Castle
    #16
    How you get the upgrade fee waived? Any tips and suggestions are appreciated!
     
  17. maflynn thread starter Moderator

    maflynn

    Staff Member

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    Boston
    #17
    Online chat, complaining about it. Sometimes it works, sometimes it doesn't.
     
  18. ucfgrad93 macrumors P6

    ucfgrad93

    Joined:
    Aug 17, 2007
    Location:
    Colorado
    #18
    Yep, although I've been hearing that AT&T is being quite stubborn in refusing to waive them this year.
     
  19. Knowimagination macrumors 68000

    Knowimagination

    Joined:
    Apr 6, 2010
    #19
    For me the mobile share plans and next are a much better deal. I am a frequent phone swapper and always end up getting the new iPhone every year also. The original iPhone is the only one I kept for 2 years. In my situation the on contract plan would be way more expensive.


    Also to the OP if I were you I would bump up to the 10GB plan the 6GB is 80 + 25 per line the 10GB plan is 100 + 15 per line on next so you pay the same price but get 4 more GB.
     
  20. nousernamespecified, Oct 12, 2014
    Last edited: Oct 12, 2014

    nousernamespecified macrumors 6502

    nousernamespecified

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    Secure Enclave
    #20
    I think there's another thing that needs to be considered. When you go with Next you get a discount on the mobile value share plans - $15 for up to 10GB and $25 for 10GB+ plans. This is per line. So basically, if you are say paying $36/month and are on a 6GB plan, you are actually paying $21/month per line.

    This is not true when you simply do a contract upgrade. Here's how the math worked out when I did a calculation for my case:

    WITH NEXT:
    --------------

    $40 - 2GB Mobile Share Plan
    $25 - Line 1
    $25 - Line 2
    $27 - iPhone 6 financing cost (line 1)
    $27 - iPhone 6 financing cost (line 2)
    -----
    $144 - Total (Monthly)

    $3456 - (Yearly) (Wow, what a number!)

    (I also get a 20% discount but I am not including that for sake of simplication nor the taxes)


    WITHOUT NEXT:
    -------------------

    $40 - 2GB Mobile Share Plan
    $40 - Line 1
    $40 - Line 2
    $200 - iPhone 6 down payment (line 1)
    $200 - iPhone 6 down payment (line 2)
    $36 - Activation fee (line 1)
    $36 - Activation fee (line 2)
    -----
    $120 - (Monthly)

    $3352 - (Yearly)



    Therefore, AT&T Next is costlier by $104 than a regular contract upgrade based on absolute math. But here's a big kicker that most people don't take into account. When you go with AT&T Next, you pay for sales tax on your phone but don't pay sales tax on the monthly payment that you owe for the phones. But in case of contract, since everything is billed as "service" you pay not only sales tax but also local taxes. Now depending on where you live at, these taxes may vary between 8-22%. I pay about 20% after adding all the local taxes. But I pay only 8% as sales tax.

    So, that difference of $104 is even smaller, or perhaps it's the other way round when you factor in the taxes over 24 months!

    Also note, I haven't considered $36 upgrade fees in case of contract upgrade since most people have had luck in getting it waived. If we do add that, then the math looks even less exciting in case of contract upgrade.


    TAX CALCULATION:
    --------------------

    Based on my past numbers, I just ran some numbers for local taxes that I would pay for AT&T Next and contract upgrade based on the above charges.

    AT&T Next - $18 in taxes ($432 over 2 years)
    Contract Upgrade - $24 in taxes ($576 over 2 years)

    The difference comes out to be $144 in taxes. And using the above example, Next was costlier by $104. So subtracting that from this amount, $144 - $104 = $40! Next will be cheaper by $40 over the course of two years!
     
  21. campyguy macrumors 68040

    Joined:
    Mar 21, 2014
    Location:
    Portland / Seattle
    #21
    OP, I was doing this math just this afternoon as I need ATTWS at a new project site. VZW doesn't work there - it's USCC territory - and roaming there just doesn't work. But, I know that ATTWS does and we need data.

    I came up with exactly the same result you did - about $200 per month. But I found that by spending $30 more per month for those two lines we get 30GB of data instead of the 6GB you've priced out. That higher quantity costs $50 per month more but gets $10/line x 2 lines greater discount.

    I'm also considering the Cricket route, but won't know how that MVNO stacks up at the rural project site until later this week. If I'm picking ATTWS, I'm going with the 30GB plan. I can always drop it down, but after 10-31 I can't get the higher amount after the promotion ends...
     
  22. iososx macrumors 6502a

    iososx

    Joined:
    Aug 23, 2014
    Location:
    USA
    #22
    I'm a long time AT&T customer. Yesterday I spent some time doing the math on every conceivable combination.

    There's some incorrect information in this thread, understandable considering the TOS.

    Bottom line is Next vs 2yr. Subsidy programs turns out to cost within just a few dollars of each other.

    It's $15 per phone access, no matter which data amount on the Next program.
    It's $40 per phone access, for phones bought via the Subsidy program.

    No activation, down-payment, upgrade or interest charges for Next.

    So presently one can go either way for what is essentially the same price.
     
  23. rui no onna macrumors 601

    rui no onna

    Joined:
    Oct 25, 2013
    #23
    Unless AT&T changed their Mobile Share plans again, it's $15 discount or $25 per line on MSV plans up to 6 GB and $25 discount or $15 per line on MSV plans 10 GB and up.
     
  24. aristobrat macrumors G5

    Joined:
    Oct 14, 2005
    #24
    Following up on rui no onna's post, the quote below is from AT&T's website:

    http://www.att.com/shop/wireless/plans/mobileshare.html
     
  25. nickspohn macrumors 68040

    nickspohn

    Joined:
    Jun 9, 2007
    #25
    I laughed out loud when I read this.
     

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