A growing percentage of people are opting to pay for their phones and take the lower service fee.
AT&T’s Next early upgrade plan is winning over customers.
AT&T Chief Financial Officer John Stephens, speaking on a conference call with analysts on Tuesday, said that the percentage of customers opting for AT&T Next is growing. A fifth of customers now choose to pay monthly installments for their new smartphone, which allows them to upgrade as early as 30 days — if they’re willing to pay off the balance of the phone.
That’s up from 15 percent of customers in the fourth quarter and 10 percent of customers in the third quarter, a solid rate of progression for the program.
“The strong sales reinforce our belief that focusing on what the customer wants is the right move,” Stephens said.
While AT&T likes to attribute the change to its response to the consumer, the company’s program was unveiled shortly after T-Mobile announced its own early upgrade program, Jump. It had previously gotten rid of contracts, lowering the price of its service in exchange for making customers pay for their phones on a monthly installment plan.
AT&T finally offered customers on AT&T Next and those who brought their own phones a break on the service plan in December. Earlier this month, AT&T said it would pay T-Mobile customers an additional $200 to switch over. T-Mobile countered with its own offer to pay up to $350 in early termination fees to any customer willing to jump to its service.
The barbs continued Tuesday. Shortly after AT&T released its financial results for the fourth quarter, T-Mobile began e-mailing reporters a preview of an ad it plans to run making fun of the $200 switching bonus offered by AT&T, noting that customers can try T-Mobile risk free, as AT&T will pay them to come back. It’s a line T-Mobile CEO John Legere used when announcing the plan while at the Consumer Electronics Show.
Still, with AT&T Next garnering its own fan, the program helped AT&T lower its postpaid customer turnover rate to a record low 1.11 percent from 1.19 percent a year ago