AT&T's Next Plan May be the Cheapest Way to Buy an iPhone, Despite the Hype

TL;DR: If you're on an AT&T MobileShare plan with 10GB (or more) data per month, AT&T Next is probably your best deal.

When AT&T first introduced its Next plans earlier this year they were received with a lot of skepticism and negativity. Most reports advised against it saying it was a bad deal, would cost more and wouldn't let you keep your phone if you wanted to.

AT&T's Next Plan may save you money

For me none of those things are true and they may not be true for you, either. You may find that AT&T Next is the best deal you can get, especially if you're on a family plan with multiple phones.

Zero-Percent Financing

The best way to think about AT&T Next is that it's a zero-percent financing plan for your phone. You have two options currently: Next 12 or Next 18. Next 12 finances your phone by dividing the purchase cost of the phone into equal monthly payments over a 20 month period. Next 18 does the same over a 24 month period. 

Make every one of those payments and you own your phone, contract-free, to do with as you please. Yes, that's right: you own your phone at the end of the AT&T Next payment term.

The "12" and "18" in each of those refer to the timing of an optional "Upgrade" feature of AT&T's Next plans. Make your twelfth (or eighteenth) payment and AT&T will let you trade in your phone (in relatively good condition) and start a new finance plan for a new phone. This is handy if you're on the "new iPhone every year" cycle. You'll never own your phone, but maybe that's not important to you.

Think of this upgrade option as you would the "residual" value on a car lease: it's a pre-negotiated trade-in price good for a certain date. Using an AT&T Next 12 plan with a 64GB iPhone 6 you will have made 12 payments of $37.50 each, or $450 total in 12 months. The full retail price of that phone today is $749.99, which means that AT&T is telling you they'll buy that phone from you for $299.99 one year from today, guaranteed, no hassle, and you can get a new one then.

Or you can pay the remaining 6 payments (of $37.50 each, totaling that same $299.99) and then you own your phone.

Simple, right?

It's Not a Contract

One thing to bear in mind is that AT&T Next is not considered to be a contract. Sure, it's a contract for a finance plan, but it's not a contract that requires you to keep AT&T service (nor is it a contract another carrier can buy out for you). You can cancel your service any time you like if you're on a Next plan, you just need to keep making those finance payments.

Again, think of it like a car financing deal. You pay your monthly car payment regardless of whether or not you actually choose to drive the car.

Next: Pricing Details

Page 2 - AT&T Next Pricing Details


Ok, But Is Next Cheaper For Me?

With AT&T's (relatively) new MobileShare plans you pay for the plan (which typically includes unlimited calling, unlimited texting and a fixed amount of data that you choose) plus a $40 per month fee per phone line added. 

If your phone is out-of-contract (meaning you own it outright or you're on a Next plan), you qualify for a discount on that $40. With less than 10GB that discount is $15 per month. With 10GB (or more), that discount is $25 per month, and this is where the difference is made.

Let's do some math and look at the cost of buying and using a 64GB iPhone 6 over a two year (24 month) period.

With a traditional 2-year contract: You pay $299.99 up-front and then are on the hook for the full per-line charge of $40 per month for 24 months, regardless of how much data you buy. This means your total cost of owning and using this phone for two years will be $1,259.99.

On a Next 12 Plan with less than 10GB of data: You pay $0 down and pay $37.50 per month (for only 20 months) to finance the phone. You also only pay $25 per month line charge instead of $40 (because the MobileShare plan gets you a $15 discount on the monthly line charge). The total you'll pay over 24 months is $1,350.00.

On a Next 12 Plan with 10GB data (or more): You pay the same $0 down and $37.50 per month (for 20 months) as above. However, you only pay $15 per month for the line charge because you get a larger discount once you cross into the 10GB data/month plans. This means your total cost over 24 months is $1,110.00.

I didn't include the (likely) $40 upgrade price on the traditional contract plan, but I also didn't include sales tax on the financed Next plans. For most folks those probably cancel each other out, but if you're in an area where you pay no sales tax the Next plans get even cheaper.

It's also worth noting that the Next 18 plans would cost you exactly the same as the Next 12 plans over 24 months. Again, they're both zero-percent financing plans. One ends in 20 months, the other in 24, but the total amount of the payments remains the same because you're not paying any interest.

Bottom Line

If you're an AT&T customer on a 10GB (or more) per month MobileShare plan, Next is the likely to be the best deal you will find. And those 10GB+ plans start to make a lot of sense as soon as you have more than 2 phones on your plan at a time even if you don't use most of your data.