In a blog post on Sunday, AT&T announced that all wireless upgrades will be on a 24-month schedule for customers whose contracts expire in or after March 2014.
The company says it will continue to offer partial upgrade discounts for customers who are at least six months into their contracts. Of course, like just about everything in the wireless world, it means signing up for another two-year contract.
AT&T’s move follows Verizon’s recent decision to do away with 20-month upgrade schedules. While both companies claim that this is all about aligning upgrades with their standard 24-month contract terms, it’s really more of a case that these early upgrades were hitting AT&T and Verizon in the wallet.
See, several years ago it made sense for wireless companies to encourage early upgrades in order to get customers off standard mobile phones and onto smartphones, which come with a higher monthly subscription rate. It was worth the cost of the subsidized smartphone for the wireless carrier to lock you into the more expensive plan for another two years.
But now, many customers are upgrading from smartphone to smartphone. Thus, AT&T and Verizon are footing the bill — often to the tune of several hundred dollars — to subsidize the upgrades, but the wireless carriers aren’t seeing any increased revenue from the subscribers as they keep their existing data plan.
Of course, by pushing the upgrade period so that it extends to the end of the contract may now encourage more customers to jump ship, as an existing AT&T customer is likely to get the same phone discount by switching to another carrier as she would by cashing in an upgrade and renewing her contract.