Want to Upgrade Your Cell Phone Faster? Here's the Answer

Are you tired of your old cell phone but are frustrated because you can’t upgrade for two years? One of these new plans may be appropriate for you. Verizon, AT&T, Sprint, and T-Mobile are all offering a new plan for customers who desire a new phone more frequently. The plans respectively are named Edge, Next, One-Up, and Jump. These new plans offered by the four major cellular carriers involve paying an extra monthly fee on top of your regularly monthly service so you have the option of upgrading your phone after one year on the plan, and every six months with two of the carriers. A recent study was done with some interesting findings. The study was a comparison between a normal two-year plan cost vs. a two-year plan using these new service plans.

Each plan is using the same criteria, an unlimited talk and text and the purchase of an Apple 16GB iPhone 5S. Let’s see how it compares to the traditional plan if you upgrade your phone once per year and also once every six months.

The study also shows the regular cost for a traditional two-year plan for the four major carriers. The definition of a traditional plan is purchasing a new phone at a greatly reduced price, sometimes even for free, in exchange for committing to a two-year contract with the phone carrier.

Here’s the cost for a traditional two-year contract with the 4 major carriers:

• Verizon-$3280, AT&T-$2966, Sprint-$2806, T-Mobile-$2739
• Now let’s look at the pricing using the new plans offered by the four carriers.
• Verizon Edge-$3,052, AT&T Next-$2928, Sprint One Up-$2280, T-Mobile Jump-$2430
• The best savings is Sprint’s One Up at $526, followed by T-Mobile Jump at $309, Verizon Edge at $228, and AT&T Next at $38.

What these new plans do is essentially amortize the cost of the phone, the Apple iPhone 5S in this case, at $650 over the 24 month period, and adding that cost onto the monthly service cost. Here’s the real deal though. The carriers are also adding an extra charge on the service, and with Verizon and AT&T, without any compensation elsewhere, you end up paying for two phones instead of just one. T-Mobile obtains the extra money a little differently, by charging $99 down-payment on the phone, plus a $10 per month to join. 

Although Sprint charges extra on top of the monthly service fee, they also refund you $15 month on your service, which results in the cheapest plan of the four.  You must keep in mind that Sprint is considered having the worst LTE service in terms of coverage of the four carriers, and its 3G network is considered the slowest.

Two of the four new plans offered actually allow you to upgrade your phone every six months, which actually turns out to be a bigger savings than if you opt to upgrade once per year. Here’s the cost numbers again using a two-year standard plan where you would purchase the phone yourself every six months. Only Verizon Edge and T-Mobile Jump offer this. It is not available for six month upgrades with AT&T and Sprint.

• Verizon-$4580, AT&T-N/A, Sprint-N/A, T-Mobile-$4586 (higher cost because you’re buying the phone)
• Here’s the new plan upgrading your phone every six months (4 phones):
• Verizon Edge-$3538, AT&T Next-N/A, Sprint One Up-N/A, T-Mobile Jump-$2630
• You save $1042 with Verizon Edge and save $1956 with T-Mobile Jump. It’s obvious that you save more money when you upgrade more frequently.

Here’s the bottom line as I see it. The four phone per year option offered by Verizon and T-Mobile is good savings, but how many people really buy a phone every six months? If you happen to fall into this category, fine. Keep in mind too that you do not get to keep the old phone under these new plans, you have to turn the phone in, so you cannot make any money by selling the phone. Under the first option, upgrading once per year with Verizon and T-Mobile and the $200-$300 savings, will be nullified by the fact that you must turn in your phone and cannot resell it. AT&T is a terrible plan any way you look at it, with the measly savings. The Sprint plan appears to be the only one where you really make out, with a $500 savings, as long as you can live with its service which is lower quality than the others.

I hope this has helped those of you looking for alternatives. The pricing structures for these new plans are somewhat complicated and these service providers use that complexity to hide the hidden fees. For many of you, sticking with your current traditional two-year plan may just be the best way to go.

If you’re looking to save some money, you might want to look at your current service and see if there are any options you could live without. Sometimes you’ll find there are charges on your service that you really don’t need or perhaps the carrier accidentally added some options on your plan that you never really wanted to begin with. That action may be the best savings of all of the ones mentioned above.

I'm Jim Scarbrough and a regular technology contributor to the Patch. You can view my other technology blog at: http://pcjournal.typepad.com/blog