NEW YORK, N.Y. - AT
The move announced Sunday follows an identical one by Verizon Wireless in April. AT
Extending the time between phone upgrades saves the phone companies money, since they subsidize each new phone by hundreds of dollars to make it available to customers for $199 or less. AT
The change reflects the growing popularity of expensive smartphones. Verizon subsidized upgrades after just 13 months until January 2011, just before it introduced the iPhone, one of the most expensive phones on a wholesale basis. Carriers pay Apple over $600 for it.
Breaking with industry practices, No. 4 wireless carrier T-Mobile USA ditched its service contracts and phone-upgrade waiting periods in March. It now sells phones on installment plans, giving customers more flexibility on the timing of their phone upgrades.