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On Signing 2-Year Contracts To Use Hand-Me-Down iPhone 3Gs

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By Jeremy Horwitz

Editor-in-Chief, iLounge
Published: Wednesday, June 24, 2009
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So an AT&T customer shows up at an AT&T Store with a first-generation iPhone and a hand-me-down iPhone 3G—a common enough scenario this week given that quite a few people are giving up their 3G units for the iPhone 3GS. “I’d like to upgrade the old iPhone to the new one,” the customer says, handing over two phones. “Sure,” says AT&T, “we can do that. But you’ll have to sign a brand new two-year service agreement.” “Wait, what?” the customer asks, “you’re not giving me a phone, I’m bringing my own, so why do I have to commit to two years of service?” “Sorry,” says AT&T, “that’s Apple’s policy.”

Such was the case over the past day as we went through the process of attempting to transform a 2007 iPhone owner into an iPhone 3G user. We were familiar with the obvious upgrade charges—the fees, the $10 additional data charge, and the $5 additional charge for text messaging—and we were willing to pay them to AT&T for a year. The goal was to let the existing customer spend that year using a hand-me-down iPhone 3G, paying $200 extra ($900 total) for faster service, and then switch her over to the inevitable 2010 iPhone. But that plan wasn’t going to work if a two-year commitment was required, and it made almost as much sense to get a brand new iPhone 3G at full subsidy instead.

Interestingly, AT&T claimed that this mandatory contract policy only applies to Apple’s products, not to other self-supplied hardware, for whatever reason. Could the issue be subsidies? No; the old iPhone 3G’s subsidy had been paid off when we upgraded to a 3GS, paid the higher than normal price, the early upgrader fee, the activation fee, and signed a brand new two-year contract. So the iPhone 3G was free and clear, ready to be handed down or even sold.

Since it can’t be handed down, perhaps “sold” is the way to go. Given the choice between signing another two-year AT&T contract, or unlocking the phone and selling it to an overseas buyer for use on a different network, it’s tempting to go the latter route.

Readers, what have you done with your iPhone or iPhone 3G units after upgrading to 3GS? Have you sold them, handed them down, or just tossed them in a drawer? What has your service provider tried to do if you’ve tried the hand-me-down route? We’d like to know.

« Chicago, the iPhone 3GS, and iPods: Your Thoughts?

Postscript: Notes on iLounge’s Comprehensive iPhone 3GS Review »

Comments

1

We have the exact same situation.  I’m tempted to unlock the phone and put in my wife’s current iPhone SIM without officially switching her to the 3G.  Or I could just unlock it and sell it overseas or to a T-Mobile customer.

Posted by Dyvim on June 24, 2009 at 2:13 PM (PDT)

2

I’ll probably unlock my original iPhone and then sell it.  I just have to figure out how to unlock it, first.

Posted by Galley in Greenville, SC on June 24, 2009 at 2:35 PM (PDT)

3

Sold it with 2.2.1 OS w/ original box & accessories online for $420 to a guy in Hawaii.

I even have the original 3G bag from launch day last year. It wasn’t unlocked or jailbroken. I’m pretty happy and I bought 3Gs for $299 w/ 2 year contract on launch day this year.

Posted by Adam Jackson on June 24, 2009 at 2:48 PM (PDT)

4

I just called up my AT&T rep and argued. You have paid your subsidy, there is no reason at all to have to commit to a 2 year contract.  As a matter of fact they’re bordering illegal again with this BS policy.  Argue and explain that you are aware of how a subsidy works.

I have two iPhones on my account, and I’ve managed to do so with only signing my soul away for 2 years total.

Posted by Jeff Latta on June 24, 2009 at 3:19 PM (PDT)

5

I think the pressing question is what that person’s upgrade date is.  If it’s 2 years out, then yes, this sucks.  If it’s just a service contract, but they can upgrade the phone without penalty, then this is not much here nor there.

Posted by amy! on June 24, 2009 at 3:40 PM (PDT)

6

I had a 2G and upgraded to the 3GS over the weekend. I gave the 2G to my girlfriend after I purchased the 3GS and signed up for the two year contract. She wasn’t required to sign up for a 2year contract, as best I know. There was no problem with her taking the 2G.

We joined a family plan and had a horrible time because she has a foundation account through Starbucks. You can’t use the Iphone 2g’s Edge Service and have a discount on the account is what we were eventually told after hours where a rep told us we could get discount without a problem. They disable each other apparently. Eventually it worked out, but a six-hour ordeal included 2 hours in line, 3 hours in store and 1 hour over the phone.

Posted by Vic on June 24, 2009 at 3:53 PM (PDT)

7

I also just contacted AT&T Support and was told that my wife, currently an owner of an iPhone2G, would have no issue upgrading to my 3G, and no new contract would be needed.
only the 5.00 for the text, and the 10.00 additional for the 3g data plan.

Posted by MikeM on June 24, 2009 at 5:16 PM (PDT)

8

Do not, I repeat *not*, sign a 2-yr contract when bringing existing equipment in.  You will be sorry.  I brought a Noka 6682 back to AT&T and was put on a 2-yr contract by the employee without my knowledge.  It was existing equipment that had been paid for free and clear.  When I wanted to upgrade to the iPhone 3G at the subsidy price ( and a 2-yr contract) it took forever to resolve the problem with the old phone.

Posted by Jason Kratz on June 24, 2009 at 7:14 PM (PDT)

9

I was planning on upgrading from the 2G to the 3GS and hand my 2G over to my wife who would be new to AT&T and be on a family plan with me, but I was told the same thing…she would need to sign a 2 year contract even though she would be bringing her own, never subsidized phone to the plan.  I was shocked by this news and then taken aback that the CSR tried to talk me into buying a 3G for her by explaining it really wasn’t that much different than the 3GS and $100 cheaper! 

Currently I have decided to just keep my 2G and we’re probably going to just get my wife a regular phone since she really doesn’t need a data plan for $35 a month on a new 3GS and I don’t want to lock her into a nearly 2 year old phone.

My only wonder is even if she were to sign a 2 year contract I would have to think she would be upgrade eligible at the subsidized price for any phone she wanted as long as she extended for 2 years from that point, but I have not asked that question.

Posted by TosaDeac on June 24, 2009 at 7:26 PM (PDT)

10

I sold my 3G on Gazelle.com for $207.00.  I qualified for the full upgrade $299.00 price so my overall cost was $92.00 to upgrade.  The price on Gazelle.com is falling daily and is down to around $178.00 now.  I have heard you can get as much as $300.00 on craigslist or ebay.  This seems like the most cost effective way to go.  Also I called AT&T 3 times before they changed their upgrade policy.  I was eligable on 7/13/09 and my wife was eligable on 2/13/10.  They told me it was because mine was the primary line and hers was an add-on and she was only paying $9.99 plus $30.00 for data.  She didn’t pay enough to qualify for upgrading after 12 months.  However, after complaining that if we divided our overall monthly cost by two we both more than qualified and the fact that I had enough rollover minutes banked to equal 2.5 months worth of already paid and unused talk time valued at over $200.00 per month, they applied a $150.00 credit to my account and said that was the only way they could do it because their hands were tied with Apple and the upgrade policy.  So it appears there is always a way around the “policy”.  I seemed to depend on who I spoke with.  1 in 3 was helpfull for me.  I could hear every person I spoke with typing away and documenting our conversations.  Just keep complaining.  Upgrade charge? Fees? No MMS? Tethering? Slow data? Dropped calls? Trapped with AT&T? If I upgrade I already have someone who wants my old phone to sign up with AT&T…...  Just don’t give in!!!!!!!!!

Posted by Jeff Rogers on June 24, 2009 at 8:54 PM (PDT)

11

I just handed my iPhone 3G down to my wife (on the same Family Plan) last night.  This morning I called AT&T and they upgraded her data plan from the old $20 Original iPhone plan to the $30 iPhone 3G plan.  The rep confirmed that it was NOT extending any contract. Didn’t even charge me any one-time upgrade charges.  Just the standard pro-rating that occurs when you make changes.

Posted by Scott Mahan on June 25, 2009 at 6:54 AM (PDT)

12

I just bought an original iphone off a friend of mine for this very reason.  Although I never had any intention of paying “The Death Star” their extortion fees for the same service or worse service then I can get with t-mobile.

I unlocked it and put my new iphone on t-mobile.  I thought I would need to be kind of secretive about what phone I was putting on their network… However, after talking to our account rep, I learned they get quite a few of these requests, and even asked what gen. I had to ensure I got the best data package.

Posted by Jim Edwards on June 25, 2009 at 7:26 AM (PDT)

13

Wow, have you even tried to just put your EDGE sim into the 3G iPhone? I did, a year ago, and reactivated my 3G iPhone, and have only paid $60 a month. And, yes, 3G data works. Then I gave my EDGE iPhone to a family member, so that they can use it as an iPod.

Posted by KenC on June 25, 2009 at 12:37 PM (PDT)

14

I’ll be going through this tonight, I picked up a 3G from a friend of mine who upgraded to the 3GS at full price, so the subsidy is paid on this phone.  I guess we’ll see what happens, but I’m going to do my best to ensure the contract doesn’t get extended.  Any tips?

Posted by Tim J on June 26, 2009 at 7:49 AM (PDT)

15

I got my 3Gs today.  The old 3G is now a 16g iPod Touch with a camera and microphone.  I’ll probably be using it as a wi-fi Skype phone around the house, and as a backup in case the 3Gs explodes.

Posted by Jerry on June 30, 2009 at 11:15 PM (PDT)

16

Can someone please confirm this?  All the people on the AT&T forums are saying this isn’t true.  I just attempted this last Saturday and was told I would have to renew both contracts, the one I bought the phone under that was eligible for an full, standard upgrade, and the one I was moving the equipment to, from a 3G to 3GS.

Posted by Sean on July 1, 2009 at 7:22 AM (PDT)

17

The AT&T rep you talked to lied to you. I have a friend who works at an AT&T corporate store and he always tells me never to go into AT&T affiliate/satellite stores (still branded to look like AT&T), because they are shady. Supposedly these guys get a commission if they sell a subsidy with no hardware, so they lie to customers all the time.

I had this exact same experience with a 2G I got from a friend. At an affiliate store, a rep told me that I would have to sign up for a 2 year contract, and would also be using my hardware subsidy, even though I brought my own equipment. I told him I understood how subsidies worked and that he was wrong and he flat out lied to my face claiming that I was misinformed.

I called my buddy and he said to visit a corporate branch and my experience was completely different. They gave me a new SIM for free, activated the phone, transferred my contacts, and showed me that I hadn’t used my subsidy. I did have to sign a new contract, but I was switching from another carrier, so that was expected.

Basically, the experience described in this post is not actual policy, but is also obviously not policed properly by AT&T because they get something out of it as well. iLounge should update this post to clarify that signing a new 2 year contract does not equal losing your hardware subsidy if you bring your own eqipment.

Posted by Scott on July 1, 2009 at 11:05 AM (PDT)

18

This was a corporate store. And due to these inconsistencies - everyone gets different answers, and worse yet, we’ve heard that you may think you’re not re-upping for two years but will get signed up for that anyway - I think that an update on our side isn’t appropriate.

Customers shouldn’t have to go through this sort of experience, with these types of ambiguities and the prospect of having to argue over contract status a year from now. AT&T needs to publish and enforce a policy that explains and guarantees the rights of bring-your-own-hardware iPhone EDGE and 3G users.

Posted by Jeremy Horwitz in East Amherst, NY, USA on July 1, 2009 at 1:03 PM (PDT)

19

I’m an owner of the original 2G iPhone; a 3G; and now the 3GS. When I got the 3G, I jailbroke/unlocked the 2G iPhone, was amazed at how easy it was to do so (am not “Mr. Technical”).

Gave wifey the unlocked 2G, put her AT&T SIM in it, worked great. Now that I have a 3GS, I did the same with my “old” iPhone 3G; jailbreak, unlock, same wifey SIM card inside. Works great.

Using a profile changer so that data isn’t charged (she has no use for iPhone data, there’s wifi everywhere), we’re paying for the extra SIM, and now the unlocked 2G iPhone will be handed off to an extended family member with their AT&T SIM.

Posted by Potsidewalkyum on July 4, 2009 at 9:15 PM (PDT)

20

I was not upgrade eligible on the 19th so I used my other AT&T account.  After I got my 3GS I proceded to the nearest AT&T Store to have them kill the sim on my 3G and move my phone number to my new 3GS.  No new contract on my ineligible plan still same termination date. I also have given my 3G to my gf and she is now happily using it as an iPod Touch.

Posted by viper09 on July 5, 2009 at 12:10 AM (PDT)

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