I don’t have many vices. But one thing I am guilty of is upgrading to the latest iPhone every year. I’ve owned the 4S, 4, 3GS, 3G and even the original phone. But there is always some sort of carrier penalty for upgrading early, since they subsidize the cost of the phone over the duration of your contract.

This year, AT&T has determined my penalty for upgrading early is $450, so the $299 32GB iPhone 5 will cost me a total of $750. Meainwhile, the cost for me to just leave is $125. So the obvious thing to do is pay the $125, then go to Verizon and pay $299, right?

I couldn’t understand why they would structure it this way. I mean, in economic terms, they are paying me $325 to switch carriers! So I called up AT&T, waited on hold for 20 minutes, and asked the gentleman why, in any universe, I would stay on AT&T, when:

  • Staying on AT&T would cost $750, while switching to Verizon would only cost $425 (to pay the penalty, and to buy a new phone)
  • I can keep the same number on Verizon
  • Verizon has much better 3G and LTE coverage in rural areas
  • In large cities, I’ve found that AT&T coverage is actually worse: I couldn’t make a phone call anywhere in downtown San Francisco last year
  • About 1/3 of my phone calls over 20 minutes are dropped on AT&T, even when I have five bars, am completely stationary and calling a land line
  • FaceTime works over cellular on Verizon, while AT&T is charging extra for it
  • AT&T publicly and blatantly lies about their “unlimited” plan, so if you were grandfathered in with this, there’s no point in staying on it
  • Internationally, Verizon actually stacks up nicer than AT&T

I actively tried to help him. I wanted him to prove me wrong, to find a flaw in my logic somewhere. He didn’t have an answer, and politely said that he couldn’t “mess with the numbers” as long as I was buying an iPhone. But he did mention that he could cut me a sweet deal if I wanted to switch to a Samsung Galaxy S3.


Posted Wed 19 September 2012