If you’re excited about T-Mobile’s Jump plan, Verizon Edge, or AT&T Next, you may want to read the fine print. Though they sound great, once again these are intentionally confusing schemes designed to charge customers more for wireless service. Our carriers have become masters of disguise. They’ve learned how to add hundreds of dollars to your annual wireless bills and get people excited about it.
T-Mobile kicked off the feeding frenzy this year. A few weeks back, it announced the Jump! plan. For a $10 monthly fee, T-Mobile will allow you to swap your phone every six months, instead of only once every two years. Sounds amazing, right? It’s not. As I explained when it came out, if you’re someone who needs a new phone every six months, and you’re also too lazy to sell your own used phones on eBay, then this is a good deal. But for the 95 percent of people that aren’t lazy fresh phone addicts, this plan isn’t so hot. It does provide phone insurance, which is nice, but to get a new phone you have to return your old phone (which is only six months old), pay a $100-$200 down payment on your next phone, and restart two years of $20/mo payments. It ends up costing you at least $280 for each new phone if you upgrade twice a year, and if you only upgrade your phone once a year (a more normal pace), then you’ll pay $460 per phone, which is pretty close to full price on some phones. And again, you will not have your old phone to sell or use as a backup.
While I’m not excited about T-Mobile’s Jump plan, it comes after some great moves the carrier has made. Earlier this year, it simplified its wireless plans when it introduced its “Value Plans,” which ended two-year contracts, extra fees, and overage charges. Prices weren’t cut a whole lot – it still costs $90 a month to get an individual unlimited data plan and a phone – but it did up consumer transparency and fairness (something eternally lacking in the wireless business). The Jump plan is a step back in terms of pricing and transparency, but you could interpret its intentions as honest. It’s offering a service and is not a rip off if you’re a lazy hardcore crazy phone addict. AT&T and Verizon’s new plans are worse.
Essentially, AT&T and Verizon are tricking you to pay the $325-$350 fee they would have charged you to end your two-year contract early.
AT&T Next and Verizon Edge are the names of two new plans from the two largest mobile carrier’s in the States. They’re terrible. To compete with T-Mobile, these new plans get rid of two-year contracts and offer you a new phone at least once a year. Neither AT&T or Verizon force you to pay anything up front for your phone, and they’re so generous that they’ve waived the stupid $35 fee they normally charge every time you activate a new phone. Instead of paying $200 for a phone up front, you can pay roughly $30 a month for one, which will be paid off in 20-24 months. And after 12 months on AT&T (or when you pay off half the phone on Verizon), you can trade that phone in for a new one and start paying all over again. Sounds great, right? No contract; a fair monthly fee for your phone; wonderful. Don’t get excited.
AT&T and Verizon are offering Next and Edge with their current, unchanged mobile plans. You know, the ones that were built for two-year contracts and have $300-$400 in subsidized phone prices built into them. So, really, you’re paying for your phone twice without ever realizing it. Verizon and AT&T are double dipping on their previous deceit. Your bill is going up, and you hardly realize it.
Essentially, AT&T and Verizon are tricking you to pay the $325-$350 fee they would have charged you to end your two-year contract early. But you’re not even leaving. You’re doing the opposite: you’re giving them a nice used phone to re-sell every year. Oh, and you can’t leave even if you wanted to go. AT&T says that you have to pay for service until you pay off your phone. It’s sneaky; it’s robbery.
I made fun of Sprint for the silly lifetime guarantee it’s offering customers (it’s not a great deal), but at least it isn’t participating in these shenanigans.
In the last two years, Verizon and AT&T took away unlimited data plans, upped rates for texting (a service that costs little to offer), and then baited users into paying double price to share small amounts (as low as a few hundred Megabytes) of data bandwidth between multiple devices – something that not everyone needs and should be offered for free. They did that by offering something few people need: unlimited talking and texting. Now we’re getting another raw deal.
It keeps getting worse. Any time a carrier offers something, it always has some hidden cost to it. Yeah, our service keeps getting faster, but we sure are paying a hefty toll. Say goodbye to sub $100 phone bills. They’re so 2012.