AP
Here's what's going on.
Starting this Sunday, customers have the option to move to a new type of plan called the Mobile Share Value Plan. This plan effectively separates the cost of your smartphone and your wireless service plan and saves you $15 per month if you've paid off your phone.
Part of the reason why plans seem so expensive is because carriers charge you a bit extra to help make up the cost of your smartphone.
You know how you can get a smartphone for $200 or less just by signing a two year contract? That's because over those two years you're making up for the rest of the ~$400 price of the phone by paying a little extra to your carrier each month. That little extra is baked right into your normal monthly bill. The Mobile Share Value plan stops charging you that baked-in fee once your phone is paid off.
Specifically, the Mobile Share Value plan saves you $15 per month on your bill once your phone is paid off. So after your two-year contract is up, AT&T will automatically knock $15 off your bill. You can also save the $15 per month if you buy a phone at full price from AT&T or elsewhere.
That's pretty much it. It's a fair deal, especially for people who like to buy their phones at full price but don't want to pay the that baked-in fee for a phone they already own in full. And if you still want to buy your phone at a subsidized ~$200, you'll get to take advantage of Mobile Share Value once your two-year contract is up.
If you want, AT&T will still let you keep your current plan. So if you like the way things are now, don't change a thing. New and current customers can request the Mobile Share Value Plan starting this Sunday. If you're part of AT&T Next, the plan that effective lets you "rent" a smartphone from AT&T for a monthly fee so you can upgrade faster, you can also take advantage of the Mobile Share Value Plan right now.
Yes, even with the $15 off AT&T's service plans are a bit more expensive than what you can get from Sprint or T-Mobile. But AT&T's advantage is that it has a much larger and more reliable 4G LTE network, the fastest kind of wireless network available. Verizon has an even larger LTE network than AT&T's, but Verizon still charges you that baked-in fee even after you've paid off your phone in full.