Until now, AT&T has always made exceptions for early iPhone adopters by qualifying these customers for full upgrade prices before their contract technically allowed it. I took advantage of this when upgrading from the iPhone 3G to iPhone 3GS, from iPhone 3GS to iPhone 4, and from iPhone 4 to iPhone 4S. Not this year. Not for the iPhone 5. Those glorious days are now over.
I learned today that my account is only eligible for "early upgrade" pricing, which is $250 more than "full upgrade" pricing. So a 16 GB iPhone 5 will cost me $450 instead of $200. Ouch.
Before learning of this fact, I was already considering making the switch to Verizon because AT&T LTE is not yet available in my area. I was hesitant, however, because of expensive early termination fees (ETFs). Well, it turns out that the ETF for my line on AT&T is $215. Let's do some basic math.
If I stay with AT&T and purchase a 16 GB iPhone 5, it's going to cost me $450. If I cancel my account with AT&T, I will have to pay an ETF of $215 then purchase the 16 GB iPhone 5 on Verizon for $200. So ultimately, the cost to switch to Verizon is $415 (upgrade fees and activation fees aside).
So for $450 I can stay on AT&T with no LTE, or for $415 I can switch to Verizon and gain LTE. This is a no-brainer.
When I contacted AT&T PR, I was told that there hasn't been a change in policies and the ineligibly of full upgrade pricing is likely due to the fact that it's only been 11 months since the release of the iPhone 4S.
We want to help customers upgrade to a new device as quickly as possible – exact timing can depend on several factors unique to each account (length of contract, payment history, etc.).
What is AT&T thinking? Why did they choose this to be the year to stop their early upgrades for iPhone customers? I understand that the timing of the iPhone 5 may be playing a role, but why not make an exception by 1 month? This is the year that the iPhone supports LTE and it's no secret that Verizon offers much more LTE coverage than AT&T. Because of this, Verizon is very tempting for current AT&T customers, but ETFs are expensive and typically incentive enough for most customers to stay -- providing that the cost of the iPhone is the same on both carriers. Instead, AT&T has decided to stop early upgrades, making it cheaper for their existing customers to cancel and switch to Verizon. If both the ETF and the upgrade price are meant to offset my subsidy, why aren't these values equal to each other?
When I informed the AT&T representitve of all of the above, she put me on hold to see if she could get an exception made for me, but returned empty-handed. I told her that my decision to switch to Verizon was now an easy one and she replied with "well, it was great having you as a loyal customer for the time that we did". Yeah, ok.
Seriously, does AT&T even want to keep their customers? There is literally no reason for me to stay with AT&T -- and as a very loyal customer who has been with AT&T since I was 16 years old (and it was Cingular Wireless), it's time to give Verizon a shot.
UPDATE: I was able to work something out with AT&T, so I'm not switching to Verizon. You can read about my experience in the forums.
