AT&T jacks up early smartphone upgrade costs

By Geoff Duncan Updated April 5, 2011

AT&T has increased the price existing wireless customers must pay if they want to upgrade to a newer-model smartphone before their existing service contract comes to an end. Previously, AT&T customers could upgrade to a 16 GB iPhone 3GS for $249, an 16 GB iPhone 4 at $399, and a 32 GB iPhone 4 for $499. Now, those prices have all gone up by $50. And the extra charge doesn’t just apply to iPhones: AT&T has tacked $50 onto the early upgrade prices for upgrading for an Android or Windows Phone 7 device.

The increased charges were first reported by Android Central. In a statement distributed via email, an AT&T spokesperson attributed the charges reflect “increased costs” for the devices.

AT&T also added $50 to the contract-free versions of most of its smartphone offerings, although it kept the contract-free iPhone price fixed at $499 (for a 16 GB iPhone 3GS) to $750 (for a $32 GB iPhone 4).

Carriers commonly subsidize the cost of phones to consumers, luring customers in with lower initial price tags that the carriers earn back over the length of a required two-year service contract. AT&T’s current early-upgrade pricing for smartphones is about $250 higher than the subsidized price for the same devices.

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