Just wanted to share my thoughts and experience with purchasing the new Lumia 950 on AT&T.
AT&T is one of the last cellphone service providers still providing subsidized phones on a 2 year contract agreement. When the Lumia 950 was slated for release with them, I was excited at the chance of getting the phone at a nice subsidized rate.
As most windows phone fans, I have been waiting for a new Lumia device since the 1020. I purchased a cheap 830 off of eBay to fulfill that need, but it was poorly supported (At&T again fails us). So by this time I had finished my previous contract with AT&T and was patiently waiting for new devices.
During this wait time, T-Mobile announced the 10 GB for everyone plans that allow each line to have their own 10 gigs of data service. Their rates were cheaper per line than AT&T also, but you would have to bring a phone or buy a phone right out. Not such a big deal since AT&T phones can easily port to T-Mobile, however, after speaking to AT&T they offered a nice discount to the service to compete so I decided to wait to see where the new Microsoft devices were going. Fast forward to today…
I purchased the Lumia 950 on AT&T for the fabulous subsidized rate of $150 (rounded up) with a 2 year contract. I then got a text message warning me that the new 2 year service would result in a more expensive service. Wait… what?! So I called AT&T and here is how it breaks down:
AT&T is proud to say they are the only Major cellphone service provider still providing a 2 year contract (so they don’t think highly of Sprint?). They claim that the discount they gave me to compete with T-Mobile was for being out of contract and still using their services. So once I sign up for another 2 year agreement and upgrade my phone, that discount will go away. This discount was $25 a month. Over two years that amounts to $600. Then you factor in the down payment of $150… this phone is going to cost me at-least $750 bucks!? On top of that this phone is Locked to AT&T!
So quick recap: AT&T says for the privilege of being in a two-year contract it will cost me $25 more a month. They claim its to repay the cost of the subsidy but it is disguised in the service charges and the final costs amount to $150 more than the unlocked phone from Microsoft.
Bring this to their attention and they will explain that 2 year agreements are not really used anymore and they will try to encourage you to the NEXT program (Basically a phone lease… but don’t use that term with them, they will try to correct you and call it a payment plan). It seems like they don’t want people signing up for a 2 year agreement anymore, but they wont actually get rid of the program. Instead they roll additional costs into the service to disguise their subsidy as a deal, but they make out in the end.
I understand the NEXT program works great for people who don’t want to dish out $550-$700 for a phone, but for me there are many benefits to owning the phone immediately. Extended warranties are usually offered and can be obtained through multiple services with little to no cost (Discover Card, Microsoft Store, Square Trade, etc). With this particular phone, it comes unlocked through Microsoft which allows me to keep my cellphone provider options open (T-Mobile… I’m looking at you!). Microsoft typically has good bundles and deals too! (The 950 XL comes with the Continuum Dock!)
For me and my situation, It is more beneficial to buy the phone with my Discover card through Microsoft. I will get the phone unlocked that can work on my current carrier and potential future carriers. Out of pocket it costs the same amount or less than using AT&T AND I get the options of many beneficial warranties in case I break the phone or it gets lost/stolen.
I can’t fathom why anyone would go through a 2-year agreement with AT&T when in the end they are thanking you for your patronage by kicking costs up higher, charging you more for the phone, and giving you a locked device. I feel like this sleight of hand trickery is the last straw and I will be taking my business elsewhere. Thankfully the Windows Lumia 950 will follow me there!