Two of the largest carriers in the US, AT&T and Verizon, announced a new program that will give new long-term customers one year of unlimited data and free smartphones in addition to the 24-month contracts they already have. The program, called “MAPS” (More about AT&T’s new program “MAPS” here), will allow dedicated customers to sign three-year contracts and get a free iPhone, which they are then free to keep in perpetuity. Customers will be required to return the iPhone within 24 months, but can use it for the three years after that.
This year, AT&T and Verizon both offered customers who sign up for their service a free iPhone XR or iPhone XS, respectively, as an incentive to get customers to stay on their networks. Some people were happy to get an iPhone for free, others were unsure how they felt about getting something free, and others again were annoyed. So, what was the motivation behind this?
Mobile phone contracts are making a comeback. U.S. wireless providers are offering the most generous discounts in years, giving some customers brand new devices with no down payment or with small monthly payments spread over several months. Discounts for AT&T Inc, T 0.14% Verizon Communications Inc. VZ 0.56%. и T-Mobile US Inc. TMUS 1.54%. Forcing customers to make long-term commitments and providing operators with the stability they need to reassure investors as the cost of upgrading 5G networks rises. AT&T started this trend in October by offering high-end smartphones like the iPhone 12 for free with a matching trade-in. Later, the discount dropped to $700, covering the full cost of the iPhone 12 Mini and most of the standard iPhone 12, among other gadgets. Verizon followed suit Tuesday by offering $700 in trade-in credits for new iPhones and $800 for high-end Android phones. The most generous offers from both companies require customers to have an unlimited data plan for a certain amount of time. It’s essentially a contract, says Jeff Moore, Director of Wave7 Research, a telecommunications research company. We see operators sticking to the customer base they have instead of increasing conversion. The strategy of free phones is a return to the mobile market of a decade ago, when U.S. carriers subsidized the price of most new smartphones in exchange for guaranteed monthly payments from subscribers. The status quo changed around 2013, and operators began offering no-contract mobile plans to customers who bought their own devices. Subscribers can also pay the cost of the new smartphone in monthly installments on their account. AT&T and Verizon now pay for most or all of these purchases in exchange for reliable revenue. Verizon’s free phone plan requires a two-year commitment. On Friday, AT&T extended its installment plan from 30 months to three years. Both companies have offers for existing customers, not just new customers or those adding a new phone line.
A weekly digest of technology reports, headlines, columns and answers to your questions from the WSJ’s personal technology gurus. T-Mobile is offering up to $1,000 in trade-in credit for new smartphones, redeemable over two years. This offer includes a wider range of mobile data plans, but only applies to customers who activate a new phone line. Each operator covers the cost of the smartphone with monthly credits equal to the normal payments for the device. For more expensive devices, like the $1,100 iPhone 12 Pro Max, there are low monthly payments. Verizon’s $700 to $800 offer also includes a $300 gift card for new customers. To qualify for the discount, the mobile service must be maintained for at least two years; otherwise, customers must repay the balance of the amounts spent to purchase the smartphone. Wall Street analysts note that the offers for existing AT&T and Verizon customers reach a much wider range of eligible customers than previous promotions. Equipping new and existing customers with new smartphones is already costing AT&T $2 billion per quarter, according to estimates from research firm MoffettNathanson LLC.
Verizon’s free phone offer requires a two-year commitment.
Photo: David Paul Morris/Bloomberg News The giveaways helped AT&T gain more subscribers, which is usually rewarded by investors. The Dallas-based company added nearly 1.4 million new postpaid phone lines in the six months through March. David Christopher, executive vice president of AT&T’s wireless division, said equipment loans are more like interest-free financing than a long-term contract for wireless services. He explained that the operator began offering subsidized financing because the price of high-end smartphones has risen from $600 a few years ago to $1,000 or more today, and customers wanted more options to cover the cost of their purchases. Our customer base is very valuable, and the low termination rate means customers are choosing to stay with AT&T, he said. This initiative was well received by the market. We love this formula.
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Would you accept a long-term phone contract if you got a free phone in exchange? Why or why not? Join the discussion below. Industry experts also say the generous phone offerings are a sign of sharper competition in the mobile market, which shrank to three national operators after T-Mobile acquired rival Sprint Corp. in 2020. Satellite operator Dish Network Inc. has received the components of a fourth national system through an agreement negotiated by the Justice Department, but the first transmission towers will not be operational before the end of the year. The consolidation has not yet resulted in a drastic increase in service charges, but monthly rates have not decreased either. MoffettNathanson estimates that average revenue per user on a post-paid plan, which operators value for its reliable monthly payments, has been about $47 over the past three years. Cable Internet Service Provider Comcast Corp. и Charter Communications Inc. closing the ranks of competitors by offering their own cheap mobile tariffs. These offers are only available in cable operators’ coverage areas where they have wireless agreements with Verizon’s network. We see a competitive and healthy market, T-Mobile’s CEO said. Mike Sievert. said last month. The more people who get into the exchange pool, the more people who jump on the ball. And when more people jump on the ball, T-Mobile usually does well. The blazing speeds of 5G are there, but they’re not as useful on the new 5G smartphones. Joanna Stern of the WSJ set up a house on wheels to see if connectivity could power all her connected gadgets, and explained the confusing world of 5G. (August 2020) Photo Illustration: Sharon Shea Meanwhile, Verizon expects customers with cheaper wireless services to switch to its more expensive unlimited data plans, which include high-speed 5G access and subscriptions to multimedia services like Disney+. The operator said that by the end of 2020 about one-fifth of its postpaid mobile customers had signed up for these unlimited premium plans, and management hopes to raise that figure to about 50 percent by the end of 2023. AT&T’s offerings include several wireless plans, but company leaders are emphasizing selling premium services to customers bundled with other benefits, such as. B. HBO Max. The telecom giant recently revealed plans to spin off HBO owner WarnerMedia into a new company that would merge with a rival. Discovery Inc. The operator did not disclose its plans for HBO Max after the deal closed, but said the Hollywood business would remain with AT&T until mid-2022. All three national operators are working to strengthen their customer base by increasing their spending on 5G infrastructure. Earlier this year, U.S. companies bid about $81 billion for new government spectrum licenses to support broadband communications, increasing the industry’s total debt. Company executives said these start-up costs will pay off when their customers experience faster 5G internet speeds in the coming years. Until then, AT&T and Verizon can continue to fight the market with discounts to avoid losing subscribers. It’s a dead end, says Craig Moffett, an analyst at MoffettNathanson. History teaches us that it is much easier to start such price wars than to end them. Email Drew Fitzgerald at [email protected] Copyright ©2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
Frequently Asked Questions
How do I apply for AT&T cell phone online?
Buying a new cell phone is always a big decision. Switching carriers can be expensive, and the new service plans can be confusing. So, how do you make an informed decision? First, take a look at the website of the carrier you’re interested in. Look for a link that says “online application” or “apply online.” This will let you start your application right away. We’ve all heard the rumors about Apple’s upcoming iPhone, but this one is a real deal. Not only is it a free phone, but it comes with a free data plan that unlocks a new feature that lets you unlock your iPhone from your iPhone, and not from a computer.
What means at in English?
If you buy a new iPhone you’re not going to be able to use it with a cellular network for just one month, unless you buy into AT&T’s Next program. Otherwise, you’re limited to the company’s limited Wi-Fi network. But if you’re an AT&T customer and you buy a new iPhone, the company will give you a free iPhone for up to two years. For AT&T, the plan is an attempt to win new customers and avoid losing them to rivals. AT&T and Verizon Wireless have teamed up to offer an iPhone upgrade plan that will give existing customers who sign up for a new two-year contract a free iPhone. The offer is available to 4G LTE smartphone customers who have fulfilled their contract commitment and who qualify for the plan. The free upgrade is valid for the iPhone 5, iPhone 5C and iPhone 5S models.
How is the service with AT&T?
AT&T and Verizon, two of the largest cell phone providers in the US, will give their customers free iPhones for two years, under a radical new plan that could help boost their sagging market shares in the US. The carriers are pushing the free upgrade smartphone program to a whole new level. The new program, called AT&T Next, is offering customers who have contracts lasting at least two years an upgraded handset every year, or a free smartphone every 18 months. AT&T Next offers two tiers: AT&T Next for $10 a month for 18 months ($0 down), or AT&T Next Every Year for a $20-per-month fee ($0 down) for 24 months.