AT&T Wants You To Pay More For iPhone Upgrades!

by Gaurav Kheterpal on April 5, 2011

The Verizon iPhone was a subject of speculation, conjecture, and rumours for an eternity. And then it finally arrived sans the big bang – no LTE. iPhone owners were left weighing their dissatisfaction with AT&T, analyzing their emotional need for an iPhone, and left wondering if the Verizon iPhone was right for them. All along, AT&T feared the worst but hoped for the best.

It’s fair to say the Verizon iPhone came, saw, but failed to conquer. AT&T recovered its lost voice and claimed a moral victory stating that the company is not at all surprised by the level of iPhone defections, noting that everything is well within the company’s expectations. Now that its worst fears are a thing of the past, AT&T wants to cash in on the iPhone bonanza. The carrier has increased the upgrade fees for the 32 GB iPhone 4 by $50 to $549. Other models faced similar increases, with the cost of upgrading the 8GB iPhone 3GS now being $299 and the 16 GB iPhone becoming even costlier at $449.

AT&T has increased non-iPhone upgrade prices by $150, with no-commitment pricing also increasing by $50. Whether it’s the looming (or delayed) iPhone 5, an attempt to recoup some of the costs of subsidizing the iPhone 4 or a move to signal its aggressive intent to Verizon, this unprecedented move is likely to further piss off AT&T’s already disgruntled customers.

Thankfully, AT&T has retained its policy to allow iPhone owners to upgrade at the new customer rate every 12 months, provided they sign another two-year agreement. However, the revised policy will hit iPhone owners who opt to upgrade before the 12- or 18-month mark or who want to sign a one-year rather than two year contract. The new pricing for iPhone Early Upgrade went into effect starting yesterday.

It’s worth noting that AT&T in October increased the early upgrade fee on its smartphones from $75 to $200. The carrier defended the move then saying its necessary to account for the growing complexity (and cost) of the devices. Interestingly, the carrier chose to exempt iPhone owners from the fee hike, presumably in wake of the looming Verizon iPhone threat. If AT&T is supposedly doing this to prepare for the iPhone 5, why raise prices for other smartphones? A BGR report suggests AT&T is blaming the price hikes on the increasing cost of smartphones. If that’s the case, why did AT&T chose to hike the price of off-contract phones. Why didn’t other carriers follow suit?

According to an AT&T spokesperson,

”We’ve updated our early upgrade and no commitment price points for smartphones and feature phones.  Only customers who are not yet upgrade eligible or who do not want to sign a contract are impacted. As mobile devices become more sophisticated, their cost goes up. This change reflects the increased costs, while still allowing us to offer customers the latest device before they qualify. We’re happy to discuss individual account and upgrade needs one-on-one with customers.”

I, for sure, would like to get into that “happy discussion” about my next iPhone upgrade. Gurr! What about you?

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Written by: Gaurav Kheterpal. Follow TheTelecomBlog.comby: RSS,TwitterFacebook, or YouTube.

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