As subsidies fade, AT&T adds 30-month smartphone installment plan

AT&T continues to press its strategy of getting people to switch to a plan in which they pay for their own device.

The Dallas telecommunications giant on Tuesday unveiled a new 30-month installment plan for smartphones. It will be available on November 9.

For consumers, this means signing up for a plan that allows for smaller monthly payments spread across a longer period. It's part of a broader shift in the industry away from the traditional contract for smartphones and toward a model in which the financial burden of the smartphone rests upon the consumer.

The program is somewhat confusingly named Next 24, because customers who make 24 monthly payments are eligible to turn in their smartphone for a new device. It joins Next 12 (a 20-month installment plan) and Next 18 (a 24-month plan).

Consumers have shown interest in the equipment installment plan because they get a break on their wireless service bill. Those who sign up for AT&T's Mobile Share Value plans can save $15 to $25 on their monthly bill, depending on the amount of data they sign up for. If customers keeps their existing phone after it is paid off, they also keep their discount.

That's a reversal of the subsidized model, where a customer signs a two-year contract and must pay a higher service fee in exchange for a discounted smartphone. Under a subsidy model, for example, the base model iPhone 6 costs $199, while it is $649 without a contract.

AT&T isn't the only one to embrace this concept, which was largely driven by T-Mobile's move to eliminate contracts and subsidies more than a year ago. Sprint CEO Marcelo Claure has hinted that he may also drop subsidies by 2015, and has also pushed the monthly installment plan, as well as a leasing option.

AT&T Next is available to new and existing customers who are eligible to upgrade their smartphone.