With the launch of Next 24 Plan, AT&T now offers three payment options for new devices sold via its stores. The Next 24 plan allows a 30 month payment resulting in the lowest monthly installments. The other pre-existing plans at AT&T are the Next 18 Plan (a 20 month installment) and Next 24 Plan (a 24 month installment).
The new Next 24 Plan made available yesterday allows customers to lay their hands on the latest gadgets offered at AT&T with $0 down payment. By combining the monthly installment plan with AT&T Mobile Share Value plans for data connectivity, customers will receive a monthly discount on the access charge, said AT&T, resulting in savings of $25 a month for plans of 10GB and higher and $15 a month for plans less than 10 GB.
AT&T Next Plans resonate with today's consumers who are inundated with so many smart devices and who want to be able to use the latest device in the market. Given the rate at which current smartphones and tablets are replaced by newer and more enhanced versions, consumers wishing to update their devices benefit from not having to purchase the device upfront yet be able to use it first on monthly installments. With monthly installments, customers are effectively 'renting' the device from the operator and the 'rent' depends on how long customers are planning to hold on to each model. Average rent paid by customers in the US market ranges from $10-$50 per month for today's range of popular smart phones and tablets. Installment based usage of devices typically come with options to purchase the device at the end of the tenure for a highly discounted price.
The zero down payment feature offered on these device plans becomes key to attracting more buyers, especially the younger customers who are often not able to fork out enough money upfront for their favourite devices and also provides a strong incentive for more people to go for newer models of smartphones as soon as these gadgets hit the market. Of course, for those who are able to afford the price of these devices, they can own them immediately by paying the full price or signing up a service contract, which typically runs for 18-24 months which allows them to purchase the device at a discount. In the case of AT&T, the carrier also has another plan which allows customers to own the device at a partial discount provided they sign up on an 6 month early upgrade plan.
'Screen Renting'
Combining device plans with shared plans allows a single household to pay by installment for many connected devices, which most probably in future will also include the fast growing family of smart wearables including the smartwatches whose prices are already hitting the range of $200-$300. The more 'screens' a household adds onto its plan, the more device plans it subscribes to. With minimal access fee or access fee waiver and the ability to share the plan's allocated data quota across all the connected devices used by the household, the monthly installments become marginal costs per screen. For bigger data buckets which typically reward customers with bigger discounts on device access fee, the rent per device becomes the monthly service cost for having another screen to watch a movie, book the hotel, track the location of a vehicle or simply listen to music. With more content providers and operators themselves providing multi-screen content, 'screen renting' will become a major strategy for pushing a higher level of data consumption within the retail customer segment of the wireless market.
