On Monday, AT&T (T) announced AT&T Next, a new service plan that allows customers to upgrade to new mobile devices much faster than under its previous plans.
The nation’s second largest wireless carrier will permit subscribers to pay for new mobile devices in installments spread across 20 months. That payment plan replaces an upfront payment for the device and a two-year service contract. After one year, subscribers can exchange their smartphones for new models, CNET notes.
Subscribers who exit the plan early will have to pay the outstanding installment balance on their devices. In June, AT&T increased the amount of time subscribers to its existing plans had to wait to upgrade their mobile devices from 20 months to 24 months.
AT&T’s move comes a week after T-Mobile announced a new plan that will allow subscribers to upgrade to new devices twice a year, for an additional monthly fee.
Earlier this year, T-Mobile unveiled its “uncarrier” service plans, which allow subscribers to pay off the price of new mobile devices in monthly installments without a two-year service contract. Unlike AT&T’s new plan, T-Mobile requires an upfront payment for new devices.
The nation’s largest wireless network Verizon Wireless, majority owned by Verizon (VZ), is said to be mulling changes to its device upgrade plans in response to AT&T and T-Mobile’s latest plans.
Shares of AT&T rose modestly in Tuesday morning trading.