AT&T’s offering some of its customers a $200 early iPhone upgrade discount ahead of their two-year contract expiration date. That may sound generous, but it actually may have unintended consequences, opening the door for loyal AT&T customers to switch to rival Verizon.
The problem with AT&T’s early iPhone upgrade plan is that the $200 subsidy is less than half the $450 subsidy that Verizon and Sprint will offer these same customers. Of course, AT&T customers who bought subsidized iPhone 4S’ will need to pay an early termination fee, which amounts to $325 minus $10 for each month of service. Those who purchased the iPhone 4S last October would need to pay AT&T an early termination fee of just $215. Do the math and you’ll see that AT&T customers would actually come out $35 ahead by switching to Verizon rather than sticking with AT&T.
The above screen grab from Apple’s iPhone 5 eligibility tool shows what many AT&T customers will run in to. Notice the $250 price difference for each of the iPhone 5 models.
Verizon, on the other hand, isn’t offering loyal customers early iPhone 5 upgrades as far as we can tell. Those who have purchased a subsidized phone from Verizon will have to wait out their full two-year terms before they’re eligible to purchase an iPhone 5 at the commonly advertised prices.
At first glance, Verizon may look like the foolish carrier out of the two since it’s charging loyal customers more to upgrade to the iPhone 5, but Verizon simply doesn’t have nearly the number of iPhone customers as AT&T does. Verizon’s built the largest 4G LTE network, reaching nearly 400 markets while AT&T 4G LTE is in less than 50, though the carrier plans to rapidly expand in the coming months. Though AT&T’s improved its wireless services in recent years, its built a poor reputation in some locales for poor call quality and unreliable data connections.
There are hordes of AT&T iPhone customers just waiting switch to Verizon, but they haven’t had a good enough reason to switch yet or the numbers haven’t added up. Some AT&T customers will simply wait until they hit their full upgrade eligibility dates to buy the iPhone 5, but those that simply must have the iPhone 5 when it launches now have the perfect opportunity to choose whether to stay with AT&T or switch to Verizon.
Of course Sprint is always an option for those who live inside of Sprint’s relatively new 4G LTE network.