Will Early Device Plans be Good for Service Providers?

T-Mobile's Jump plan, the Verizon Wireless "Edge" program and the AT&T "Next" plans for more frequent device upgrades might not be the best plans for most smart phone users, as attractive as they will be for people who really want to upgrade often, and really do not care so much about the cost of doing so.

One might ask whether the plans will be good for the service providers who offer the plans. 

At least in the case of AT&T and Verizon Wireless plans, where the traditional recurring cost is assumed by many observers to include both the cost of service and the recouping of handset subsidies, it so far does not seem to be the case that users who want to take advantage of the early device upgrade feature are compensated for separating their device plans from their service plans by lower service prices. 

In other words, buying a device on the installment plan, with the possibility of early upgrade, does not come with a reduced service plan cost.  That might strike you as unfair. 

It might also be argued that the early upgrade decision is a relatively costly proposition for users who take advantage of the feature, at least on Verizon and AT&T networks. 

It actually might not be "unfair" to consumers who want to take advantage of the early upgrade.

AT&T and Verizon Wireless might argue they still are subsidizing devices when a user pays half the retail price and then upgrades without paying the final half of the full device cost. 

If that is so, then maintaining the recurring service plans equivalent to "device plus service" plans makes sense, since service providers essentially recoup at least part of the potentially foregone device payments.

In other words, if the assumed device subsidy is $200, representing half the retail cost of $400, then when a consumer has paid off $200, returns the device and buys another, the carrier is left with $200 in phone subsidies to cover. 

The unchanged monthlhy recurring fees help the carrier recoup those lost device payments. 

So keeping the former "device plus service" price essentially compensates AT&T or Verizon Wireless for the lost subsidy recovery when a user upgrades after paying for half the full retail cost.