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AT&T Helps Us Understand New iPhone Upgrade Pricing
Not all iPhone users are created equal...
by Karl Bode Thursday 18-Jun-2009 tags: business · wireless
Yesterday we talked with AT&T about the carrier's new pricing olive branch they extended to current iPhone customers eager to upgrade to the 3GS at subsidized prices. At first glance, it appeared that AT&T was just giving customers whose contracts were up within the next three months a three month reprieve -- allowing them to upgrade to the 3GS at the full subsidized price point of $199 or $299. But there's a little more to it then that.

The first thing you need to understand is that not all iPhone users are created equal when it comes to their upgrade eligibility window. Some customers who signed a two-year contract to get an iPhone 3G are upgrade eligible after just a year. Different users have different upgrade windows based on a number of factors, which AT&T isn't completely sharing. One of those factors is whether you spend $99 a month or more.

"In terms of exactly what goes into the eligibility calculation, for competitive reasons, we have not published all the details of our policy," AT&T's Seth Bloom tells us. "But it is based on monthly recurring charges, on time payments/account in good standing, and other factors," he says. "As you’d expect, in general, the more you spend with us, the less time you have to wait to purchase another device at a discounted price."

Yesterday's announcement (also see FAQ) (pdf) by and large helps those customers that are under AT&T's good graces. We asked AT&T for a concrete example, just for clarity's sake.

"Let’s say you have an upgrade date that’s 14 months into your 2 year contract -- a pretty good thing by itself, since you signed a 2-year contract," says Bloom. "If you bought iPhone 3G in July of last year, that date would be around September 2009," he says. "Until today’s announcement, that means that if you wanted to wait for the full subsidy, you’d need to wait to buy a 3G S in September," says Bloom.

"With this announcement, we’re saying that if you’re an iPhone 3G customer whose upgrade date is anytime in June, July, August, September -- we’re pushing it up to this Friday."

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Matt
All noise, no signal.
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Jamestown, NC
kudos:12

December of this year and September of 2010

We have two iPhones on our family plan. One is eligible for upgrade in December of 2009, the other is December of 2010 and we have only been AT&T customers since December. So it looks like we spend enough to be eligible for full discounted pricing on one iPhone after a year.

Bit
Premium
join:2009-02-19
00000

1 edit

It isn't that evil

They said what a few of these factors are in their FAQ.

»www.att.com/gen/press-room?pid=1574

quote:
Pricing

Importantly, we want our customers to better understand our wireless device upgrade program. Like most U.S. carriers, we offer a variety of phones that we sell below our actual cost when customers agree to sign service agreements. In general, the more a customer spends with us, the quicker they become eligible for a price break on a new device. For example, iPhone customers who spend more than $99 a month per line with us generally are eligible for an upgrade between 12 and 18 months into their contract.
So if you pay your bill on time and spend a bit more than average (eg $99), you can upgrade earlier. These are subsidized phones they claim to be selling you BELOW their cost and normally you aren't eligible for an upgrade until your 2 year term is up. But if you are a particularly good customer who pays on time and has a pricy plan, they will let you upgrade early because you are paying enough monthly to justify them giving you another new phone at a subsidized price.
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Sandman5
Premium
join:2002-07-10
Strafford, MO

So what does that mean for current AT&T customers...

that don't have an iPhone yet?

My wife has already said that she wants an iPhone but we got new phones a few months ago (I'll hafta call ATT to find out when it was). She had mentioned getting an iPhone at the time but I think we (she and I) talked her out of it. Now she has played with or seen someone else's iPhone and brought it up again.
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scots
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Re: So what does that mean for current AT&T customers...

If you just got new phones a few months ago you won't be eligible for discounts on the iPhone or any other phone for a while.

Sandman5
Premium
join:2002-07-10
Strafford, MO

Re: So what does that mean for current AT&T customers...

That's what I was guessing but why make it easier for customers that already have an iPhone to upgrade to the new one but not allow all of your customers to do the same?
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cdru
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So?

So is this really news? All carriers do this.

People signed a contract for X months in exchanged for a discount on their current phone. AT&T expects to recoup that discount over that period of X months. If they give you the same discount on a new phone and the new contract end date is 2 years from today, they would be losing what ever the prorated discount was for the remaining term. If you spend more with them and pay as expected, they'll work with you. It sounds like AT&T is being a good company here instead of just painting all renewals black and white based solely on contract date.
SyNiSt3r

join:2007-04-26
Morristown, TN

Re: So?

well i called my customer service rep and they said it wasnt based on price. Go figure. they told me i could upgrade with no problem tomorrow although i was listed for dec and dont pay 99 bucks.
iria64

join:2003-04-14

Is this going to happen every year

Next year when apple announce the 3G SS (super speedy) are all those who cried this year going to cry again next year?

How about these people don't upgrade this year, live with the contract they signed and next year when the latest and greatest iPhone is released they will be eligible for the full subsidized price.
xirian
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Beacon, NY
kudos:1

Re: Is this going to happen every year

The main reason I want the s is for the better camera, but Im not due until december, so I'll probably end up just waiting til next year. Hopefully they add a flash to the camera and I wont have to upgrade after that.
openbox9

join:2004-01-26
Alexandria, VA
kudos:1
said by iria64:

Next year when apple announce the 3G SS (super speedy) are all those who cried this year going to cry again next year?
Unfortunately, I would expect so. Mark your calendar for the whining to begin.
said by iria64:

How about these people don't upgrade this year, live with the contract they signed and next year when the latest and greatest iPhone is released they will be eligible for the full subsidized price.
Egad...crazy talk. Why should we expect people to honor contracts that they knowingly and willingly entered?

Aozora

join:2008-11-28

1 edit

Re: Is this going to happen every year

said by openbox9:

said by iria64:

Next year when apple announce the 3G SS (super speedy) are all those who cried this year going to cry again next year?
Unfortunately, I would expect so. Mark your calendar for the whining to begin.
said by iria64:

How about these people don't upgrade this year, live with the contract they signed and next year when the latest and greatest iPhone is released they will be eligible for the full subsidized price.
Egad...crazy talk. Why should we expect people to honor contracts that they knowingly and willingly entered?
I am pretty sure the reason most providers do a contract is for you to stay with that company and not to stay with that phone. I have changed phones various times without much trouble.
openbox9

join:2004-01-26
Alexandria, VA
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Re: Is this going to happen every year

Have the phones cost as much as the iPhone?
jjeffeory

join:2002-12-04
USA
said by openbox9:

said by iria64:

Next year when apple announce the 3G SS (super speedy) are all those who cried this year going to cry again next year?
Unfortunately, I would expect so. Mark your calendar for the whining to begin.
said by iria64:

How about these people don't upgrade this year, live with the contract they signed and next year when the latest and greatest iPhone is released they will be eligible for the full subsidized price.
Egad...crazy talk. Why should we expect people to honor contracts that they knowingly and willingly entered?
Are we talking people or corporations?
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Is this going to happen every year

I stated people in my comment. Why?

ninjatutle
Premium

join:2006-01-02
San Ramon, CA
It happened 2 years in a row now and it will happen until the next millennium. Last year they were pissed the price of the phone dropped so much, after much crying, Apple had to issue a refund to the crybabies.

»www.youtube.com/watch?v=r2U4hyT0gIM

djrobx

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Not all iPhone users are created equal....

While yesterday's news sounded good on paper, I'm guessing the majority of customers will NOT qualify for a new iPhone within the "olive branch" window. Most people I know become eligible for an upgrade in the 18-24 month range, safely outside the rules AT&T agreed to bend.

2 year handset upgrade eligibility is the norm, so what AT&T is doing is exactly what I would expect. The original unsubsidized iPhone seems to have confused people a bit - those customers paid full price so they didn't burn up their eligibility to have one.
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gdm
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Re: Not all iPhone users are created equal....

I think what they are stating is true, we pay about $130.xx for two phones. My wife's line is the add-on line $9.99 plus $5 for texting. So my line is spending $115 a month and we have been with AT&T/Cingular for 5-6 years.

I bought my iPhone in mid December last year and it says I am eligible to upgrade on 11/09 this year. So basically 11 months into my 24 month contract I can upgrade if I decide to.
Cod

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Kernersville, NC
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said by djrobx:

While yesterday's news sounded good on paper, I'm guessing the majority of customers will NOT qualify for a new iPhone within the "olive branch" window.
Pure speculation... and not that your opinion is jaded by any means with the sig you have

gdm
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Re: Not all iPhone users are created equal....

What signature? It's not speculation. I have verified this with a few people and depending on the $$ you spend per month it's coming true. I did have a friend that missed one payment and he isn't falling into that 11 month, more then $99 a month category.

Upset since you don't qualify?

Karl Bode
News Guy
join:2000-03-02
kudos:29

Re: Not all iPhone users are created equal....

I have perfect credit, but own an iPhone with a monthly bill that skirts $89 monthly or so, so I don't apparently qualify. So you're right. There are plenty of people left out of this, which of course is the point for AT&T...
openbox9

join:2004-01-26
Alexandria, VA
kudos:1

Re: Not all iPhone users are created equal....

How long until your current contract with AT&T is up for renewal?
jsgiv

join:2009-03-01
Woodstock, GA
said by gdm:

What signature? It's not speculation. I have verified this with a few people and depending on the $$ you spend per month it's coming true. I did have a friend that missed one payment and he isn't falling into that 11 month, more then $99 a month category.

Upset since you don't qualify?
Funny - I spend approximately the same as you do (3g with 2 additional lines = ~$120-130/month) as well as I'm signed up for ATT Landline, etc. as well - bringing my total bill to around $180-200/month. Got the iPhone back in September of last year, before you, haven't missed a payment, good credit, etc., yet - according to the website - I'm not eligible until February 2010?

Not that I *want* to upgrade - as it's (3G S) a marginal upgrade at best - that and I'm considering not getting another iPhone (yes the honeymoon's over....) when my contract finally does expire anyway..

Same goes the 3.0 update (wow - we finally got Cut/Paste - whoopee - where's flash?) and with ATT's stance on MMS / Tethering - "they're not ready for it..."???

Give me a break - more like "they're not ready to charge us for MMS / Tethering" yet....

gdm
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join:2001-06-15
Mchenry, IL
kudos:3

Re: Not all iPhone users are created equal....

jsgiv,

Is yours the main line? Also how long have you been with AT&T. I also have U-Verse all three services not sure that's influencing this since it's a separate bill but I could combine the bills if I wanted to.
jsgiv

join:2009-03-01
Woodstock, GA

Re: Not all iPhone users are created equal....

said by gdm:

jsgiv,

Is yours the main line? Also how long have you been with AT&T. I also have U-Verse all three services not sure that's influencing this since it's a separate bill but I could combine the bills if I wanted to.
Yes - my number/iPhone is the primary - been with them for well over 4+ years (upgraded to the iPhone last year) - and no, I don't have U-Verse ( which I *would* if it were available.. ). So again - ATT's "selection" of criteria for those users to be allowed to upgrade without the additional "tax" continues to be rather vague - as per their description via the statement on their website (and by your statement as well) indicates I'd be eligible for the upgrade for the lower price.

Not that it matters much - as I'm not really interested in upgrading anyway - but it's another example of the tatics that ATT/Apple continually batter their consumers with that ultimately cause more aggravation than necessary. Why not simply post a clear definition of the requirements necessary for the upgrade? Instead of a vague "open" letter to the public that doesn't explicitly and clearly define what the requirements for the upgrade are?

I already know the answer - but it's just irritating to me as a customer to see companies like ATT / Apple trip all over themselves in order to protect their marketshare and/or product line. I'd rather they be honest and upfront with "To upgrade you must have had an $100+ average phone bill in good standing over the past 12 months - at which point we'll upgrade you for the same subsidized fee of $199" - Quite simple and effective.

Instead - we get trivial updates - with limited functionality (this is a full-on computer in our hands BTW) - with the ongoing "we're not ready" message to the general public. And while there is the possibility of Developers creating / expanding this functionality - they're unfortunately at the whim of ATT/Apple when it comes to creating something that's truly useful (i.e. tethering).

All-in-all - yes, the iPhone is a great piece of hardware, albeit severely limited by the companies that produce/support it. Which is, unfortunately, extremely disappointing. However, in a year when my contract is up (as agreed upon and expected), when I've grown weary of waiting (already tired of waiting - can ya tell? ) *still* for tethering and other "expected/normal" functionalities (turn-by-turn GPS anyone?) - I'll re-evaluate heavily with regards to the available phones / service providers on the market - as the only thing *I* can do as a customer is speak with my money..

Funny - I almost bought a Blackberry - and it had copy/paste, MMS, tethering, and Turn-By-Turn GPS already.. what was I thinking? Oh yeah - I bought into the "hype" that is Apple...

atuarre
Here come the drums
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RE

Who cares? If you want the 3GS that bad, add a line and be done with it. I am sick and tired of people whining on here, on Twitter, everywhere about no MMS, no this, no that. I can see why this world is as screwed up as it is. People seem to care more about their phone, and what it can do, than the world being shrouded in even more darkness than before.

ToxicDrew
Premium
join:2001-09-24
Chicopee, MA

Re: RE

said by atuarre:

Who cares? If you want the 3GS that bad, add a line and be done with it. I am sick and tired of people whining on here, on Twitter, everywhere about no MMS, no this, no that. I can see why this world is as screwed up as it is. People seem to care more about their phone, and what it can do, than the world being shrouded in even more darkness than before.
The irony being that you are whining on here about the whiners.
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sonicmerlin

join:2009-05-24
Cleveland, OH
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Re: RE

Lol.

Not to mention "world being shrouded in even more darkness than before". WTH???

Mizzat
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Crazy to me

They will pay $1000+ for a laptop you can get comparable for less, and will be overjoyed about it, but give them discounts once and when they want to upgrade less than a year later they complain about not getting discounts? Give me a break!

I like the Gizmodo's article the best.

»gizmodo.com/5284318/whiners-of-t···de-price
--
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fiberguy
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Re: Crazy to me

quote:
Or better yet: Don't buy a new phone. Who cares about "new." Does your iPhone 3G work now? Yes? Then get the free iPhone OS 3.0 and enjoy the speed boost from optimization and the rest of the apps. In this economy, you will do yourself a favor. This is exactly what I am doing.

In the meantime, do the rest of the world a favor and stop whining about what you are entitled to. We don't live in your pretty me me me ME world.
AWESOME posting... I wish more people were like this guy!

KrK
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Re: Crazy to me

said by fiberguy:

We don't live in your pretty me me me ME world.
These days I'm not so sure.

I certainly am surrounded by a lot of people who think indeed, the world revolves around them. The problem is they all think that.
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delusion ftl

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2 year lease

Could someone please direct me to the place i can go to sign up for a 2 year loan with 299 dollars due at signing and ~110 dollar a moth payments?

This loan will be for the device that i keep in my pocket and use occasionally to communicate. Yes the same type of device that millions of users pay less than 40 to 50 dollars a month often without a loan term.

Also make sure it's for the device that I cant put a different/more memory space on because heavens knows no other device in the history of the planet has that ability.

Oh, and I want to make sure that when my loan is up that the product I got the loan for is unusable for communication unless I continue to pay my monthly payments to the original contract holder. This is important because I don't want a device that I purchase to be able to be used to communicate on any other potentially less expensive provider, even after I meet all the terms of my 2 year loan.

Oh wait, i found the link. Nevermind.
»www.wireless.att.com/iphone/

a333
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Rego Park, NY

Re: 2 year lease

Huh?

ToxicDrew
Premium
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Chicopee, MA
said by delusion ftl :

Could someone please direct me to the place i can go to sign up for a 2 year loan with 299 dollars due at signing and ~110 dollar a moth payments?

This loan will be for the device that i keep in my pocket and use occasionally to communicate. Yes the same type of device that millions of users pay less than 40 to 50 dollars a month often without a loan term.

Also make sure it's for the device that I cant put a different/more memory space on because heavens knows no other device in the history of the planet has that ability.

Oh, and I want to make sure that when my loan is up that the product I got the loan for is unusable for communication unless I continue to pay my monthly payments to the original contract holder. This is important because I don't want a device that I purchase to be able to be used to communicate on any other potentially less expensive provider, even after I meet all the terms of my 2 year loan.

Oh wait, i found the link. Nevermind.
»www.wireless.att.com/iphone/
Someone needs to give you your medication. What time is it on the cuckoo clock again? Answer me one question though, What phones out there come standard with 8, 16, 32 GB in them? Why would I need a extra orifice on my iPhone for a SD card? lol Cuckoo, Cuckoo...
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jjeffeory

join:2002-12-04
USA

Re: 2 year lease

said by ToxicDrew:

said by delusion ftl :

Could someone please direct me to the place i can go to sign up for a 2 year loan with 299 dollars due at signing and ~110 dollar a moth payments?

This loan will be for the device that i keep in my pocket and use occasionally to communicate. Yes the same type of device that millions of users pay less than 40 to 50 dollars a month often without a loan term.

Also make sure it's for the device that I cant put a different/more memory space on because heavens knows no other device in the history of the planet has that ability.

Oh, and I want to make sure that when my loan is up that the product I got the loan for is unusable for communication unless I continue to pay my monthly payments to the original contract holder. This is important because I don't want a device that I purchase to be able to be used to communicate on any other potentially less expensive provider, even after I meet all the terms of my 2 year loan.

Oh wait, i found the link. Nevermind.
»www.wireless.att.com/iphone/
Someone needs to give you your medication. What time is it on the cuckoo clock again? Answer me one question though, What phones out there come standard with 8, 16, 32 GB in them? Why would I need a extra orifice on my iPhone for a SD card? lol Cuckoo, Cuckoo...
Maybe he wants choices? Maybe he wants more than 32GB of ram? Choices are good. Maybe he can get 32GB for less than what Apple is charging for that feature?

MSauk
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Sandy, UT
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said by delusion ftl :

Could someone please direct me to the place i can go to sign up for a 2 year loan with 299 dollars due at signing and ~110 dollar a moth payments?

This loan will be for the device that i keep in my pocket and use occasionally to communicate. Yes the same type of device that millions of users pay less than 40 to 50 dollars a month often without a loan term.

Also make sure it's for the device that I cant put a different/more memory space on because heavens knows no other device in the history of the planet has that ability.

Oh, and I want to make sure that when my loan is up that the product I got the loan for is unusable for communication unless I continue to pay my monthly payments to the original contract holder. This is important because I don't want a device that I purchase to be able to be used to communicate on any other potentially less expensive provider, even after I meet all the terms of my 2 year loan.

Oh wait, i found the link. Nevermind.
»www.wireless.att.com/iphone/
that right there was awesome! nice
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megatron266
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1 edit

This is what they should do...

All carriers should drop the whole upgrade program and stop providing the handsets along with the warranty programs and insurance programs. They need to put this back on the phone makers along with the warranty programs and the mobile phone insurance companies. Let the cell phone makers compete in selling their own product and do like Dell does. Design your own phone with the specs/carrier you want and buy it full price from them. If the makers of the phones want to sell more of them then they would need to lower the prices to make them more affordable.

Once you buy your phone then you call the carrier you selected the phone to work on and open an account. Get a promotional plan or service then wait for your contract.

You want insurance? Here call this number for insurance pricing. Need to make an warranty claim? Here is the number to Samsung or Apple.

This would be my cell phone company if I had one.
jjeffeory

join:2002-12-04
USA

Re: This is what they should do...

said by megatron266:

All carriers should drop the whole upgrade program and stop providing the handsets along with the warranty programs and insurance programs. They need to put this back on the phone makers along with the warranty programs and the mobile phone insurance companies. Let the cell phone makers compete in selling their own product and do like Dell does. Design your own phone with the specs/carrier you want and buy it full price from them. If the makers of the phones want to sell more of them then they would need to lower the prices to make them more affordable.

Once you buy your phone then you call the carrier you selected the phone to work on and open an account. Get a promotional plan or service then wait for your contract.

You want insurance? Here call this number for insurance pricing. Need to make an insurance claim? Here is the number to Samsung or Apple.

This would be my cell phone company if I had one.
These companies make money on the insurance scam they currently offer. I used to pay for insurance until I actually had to try and use it a couple of times. You might as well take the money and save it yourself.

longstreet

join:2004-11-14
Plano, TX

2 edits

question

Someone explain this to me.

I bought two 3G iPhones exactly two weeks after they came out. (We upgraded from the first gen iPhone, signed new contract)

I spend $150 + a month on service.

The AT&T site is saying I'm eligible in Jan 2010? This doesn't make sense. Literally, 2 weeks after they were out, when the lines at the Apple stored died down, I bought ours.

I want to upgrade again to the GS and sign another contract, but AT&T wants me to wait 6 months? I thought customers who've had the 3G phone nearly since it was released could upgrade?

edit **

Update : I can update, but it's not their **BEST** upgrade pricing. I'd still have to pay $400 per phone to upgrade . . .and still have a contract.

If I wait until Jan, then I can upgrade for $200
largerobert

join:2002-02-03
Madison, TN

Dummies like me!

What about us dummies that bought a iphone 3G 16 GB about 3 to 4 weeks before the new 3Gs came out. I'm not complaining but I'm wondering if there is any plan to help "dummies such as me" that did that.

I knew that Apple was going to release a new phone sometime but I didn't know it would be that soon. I have been an ATT wireless customer since 99 or 2000 I don't exactly remember but for sure since 02 because I remember getting a new Nokia one of the 1st digital phones when they made the switch to the new network

So anyway most of the companies I buy software from say like cakewalk and MOTU (they are Digital Audio Recording Apps I'm a musician and cost 2 times the price of the iphone) So anyone that buys the current version of their SW can get the new version for almost free it depends on how many days you bought the app before the new release. Last year I bought the current version 2 weeks before the new update so I qualified for a free update and the farther away from the new release you go the more it costs to upgrade up to a limit of 60 days I believe.

So does anyone think that ATT might do that???? LOL I know I'm dreaming hehehe!

I love to dream!!

largebob
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