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Thinking of upgrading to the latest smartphone? Sprint(s s) is already offering a $100 smartphone credit if you port your number to the network, but AT&T(s t) appears to be fighting back. The carrier announced a new AT&T Trade-In Program on Tuesday. Starting on May 1, you can turn in an old smartphone and get at least a $100 credit towards your next smartphone, effectively cutting in half the up-front contract price of a Samsung Galaxy S 4, entry level Apple (s aapl) iPhone 5 or HTC One.
AT&T says you’ll get a minimum credit of $100 and if the phone is worth more, it will increase the credit accordingly. Once the smartphone is turned in and evaluated, customers can use the credit immediately in three ways: “towards an accessory purchase, apply it to an existing bill, or even donate it to AT&T’s charitable cause Cell Phones for Soldiers.” As long as the phone is no more than three years old and in good working condition, AT&T will accept it. (Maybe I’ll dig out my old Palm Pre!) According to an AT&T representative, it will even take phones from other carriers.
These deals reinforce that the cellular market is all about the services and ongoing revenue per user. Carriers generally don’t make money on hardware sales unless contract customers continue using their hardware after the contract period. T-Mobile is the exception to that rule, having branded itself the “uncarrier” and by separating the cost of hardware and services: Once you pay your hardware off with T-Mobile, your monthly bill is reduced to just the service plan.
I won’t say that AT&T just completely trumped Sprint’s $100 deal, but it’s likely going to take the wind of Sprint’s promotion. AT&T currently has LTE service in far more areas than Sprint. And even better — if you use AT&T’s network, that is — fallback service drops to HSPA+ which can be nearly as fast as LTE. Sprint’s fallback outside of LTE is EV-DO service, topping out around 1.5 Mbps.