I rang ATT today to try and find out why a friend who pays within $10-15 of what I pay per month, is eligible for the $299 upgrade after a year as a customer, and I am eligible for a $499 upgrade. Illogical point one: My friend had 450 mins, unlimited text, 20% discount - customer for one year. I had 450 mins, 200 texts, 17% discount - I have been a customer for 3 years, and upgraded only once (three weeks before he signed up) Our actual monthly bills were nearly identical (~$13). Neither the original representative nor manager could clearly spell out what affects upgrade eligibility, but the manager suggested that it accounts for the bill prior to discounts applied. She suggested that plans in the $90 and up range will trigger an upgrade more quickly than those in the $50-80 range. Assuming the difference of $15 to go from 200 texts to unlimited (Discounts apply to the primary service only ie call minutes) The lesson gleaned is, if you are going to upgrade every year and stay an ATT customer, it is beneficial to pay $15 more per month for 12 months ($180) than it is to pay $200 more for early upgrading - Plus there's the benefit of an added feature (many more texts). Att is giving more service and making marginally less per year the way they have structured upgrade pricing. You could substitute larger data plan for texts with the same result at a greater cost to ATT than the texts. Illogical point two: The ETF on my account is now ~$110 Signing up as a new customer one pays $299 phone + about $40 in activation fees + etf to cancel the existing contract = $450 Buying an upgrade before February of next year = $499. My thoughts are - someone, somewhere, made a mistake in their reasoning. Regardless of one's thoughts about upgrade pricing and policies neither of the above scenarios seems particularly logical in my eyes. Obviously this is one reason for increased ETF, although I would need more data to see if it can be offset. Data unavailable until this time next year. Still for veteran customers on this upgrade cycle, ATT could lose money on cancellation and new signup procedures. Happy to read some feedback on this, it's quite baffling. I'm not sure I mind so much paying the early upgrade fee, but it certainly does tell me that I should be using either more data or more texts, as I end up paying the same if I upgrade yearly anyway. Additionally ATT is not providing a service level to veteran customers, and disallowing managers or others to supervise what surely is a complex algorithm (relatively) calculated by a computer, seems a mistake for customer retention. It seems someone should have worked this through more thoroughly. While the savings per customer are nominal for one customer, multiply $20 per year discount (illogical point one) with increased interval and many more texts or megabytes by 300,000 customers. The former accounts for $6 million for one cycle... for the latter one could calculate substantially more in infrastructure upgrades. Consider then adding even 50,000 customers who calculate an upgrade is more expensive than a cancel and new contract, and ATT policy has cost them even more.