By Ian Bush
PHILADELPHIA (CBS) – The big wireless companies are doing very public battle these days for your cell phone business, but the price war doesn’t always end in your favor.READ MORE: Police Investigating After Person Was Struck By Car On Route 38 In Maple Shade
The spat between T-Mobile and AT&T has reached the radio, billboards, and other ads.
“T-Mobile has really amped up the level of competition since they got their new CEO less than a year ago,” Sascha Segan, lead analyst for mobile at PCMag.com says T-Mobile — with its Jump plan — is trying to appeal to those who want that new iPhone or Galaxy right when it comes out.
“If you’re a very frequent upgrader, then this can save you some money.”READ MORE: Big Decision Looming For SEPTA Employees As Union Fights For Better Wages For Its Workers
AT&T calls its version “Next”: unlike with T-Mobille, there’s no upfront fee for the device; instead, you pay up to $50/month on top of regular service charges.
But the fine print uncovers some New Math.
“It’s actually cheaper to pay the early termination fee on a two-year plan and sell your own phone on eBay than to turn it back to AT&T who can then resell it for a profit,” Sagan says. “For instance, with an iPhone, after about six months, that becomes more than you would have paid for a discounted iPhone. After about 12 months, you end up paying more that you’d pay for a discounted iPhone plus the termination fee. They’ve done the math to make it pretty hard to get a financial advantage here.”
This summer, Verizon is expected to announce its own appeal to the early-and-often upgrader.MORE NEWS: Southwest Philadelphia Block Renamed After Rev. Paul 'Earthquake' Moore
“These carriers all have very smart accountants, and they’re not going to set up these plans so they make less money than they do now.”