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AT&T US Moves to 3-Year 5G Phone Contracts

by Neil Mawston | 6月 09, 2021

The US "carrier wars" are heating up.

Verizon, T-Mobile and AT&T this year have been battling it out with surprisingly generous trade-in discounts for new smartphones. Swap an old 4G Android or iPhone for a new 5G model and get up to US$800 knocked off the price.

Now, AT&T has taken the fight to its Equipment Instalment Plans (EIP) for postpaid customers. Gone are the 30 (and 24) month deals. Replaced only with 36-month contracts. This is good news for churn, because a customer is locked in for longer. Bad news for upgrades, because a customer cannot replace their phone sooner.

Trade-ins accelerate replacement cycles... Longer contracts decelerate them...

We expect Verizon, T-Mobile and others (like Dish) to follow AT&T's lead. Three-year deals look set to become the norm. But is it a wise thing to do? And will it last? There are going to be a lot of aging 5G phones on AT&T's 5G network by 2024, which will cap the operator's ability to lift future ARPU.

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