As of 2015, AT&T no longer offers free phone upgrades to its customers. Instead, it operates a program known as AT&T Next, which allows a customer with a service plan to pay sales tax on a new phone and then make monthly installments on the price of the phone over a set period of time.
In the past, cellular service providers, such as AT&T, allowed customers with qualifying plans to upgrade to a newer model of phone for free in exchange for signing up for a set duration service contract. While the company still offers this program for new customers, it no longer offers it to existing customers. Its new program instead functions as a payment plan for upgrades. After initiating the plan, the qualifying customer chooses a phone and one of several payment plans. All plans allow the customer to only pay the sales tax on the phone at the time of agreement, waiving any activation fees or early termination fees on an existing contract.
Each plan operates over a different period of time, ranging from 20 to 30 months, during which AT&T charges a percentage of the retail cost of the phone to a monthly bill with no interest. After a certain period of time, you have the option to upgrade to another new model under the same payment arrangement. You are no longer responsible for any remaining payments and only have to pay sales tax for the new phone.