AT&T (NYSE: T) has expanded its equipment installment payment plan to also cover accessories. Starting today, the carrier said its wireless customers can purchase accessories such as Bose SoundLink speakers or LG Tone Infinim headsets through the plans and pay them off in monthly installments with no down payment and no interest.
AT&T said the offering is only available through its retail stores, and that customers can only purchase one accessory per phone number or two per account. The offering only covers accessories priced between $149 and $400.
The launch is notable because it will allow AT&T to potentially sell more accessories through its retail outlets, thereby deriving more revenues from the sale of accessories.
The move is also not surprising considering how popular equipment installment plans have become for the purchase of smartphones. The plans generally allow customers to break up the cost of devices into monthly payments stretching across 12, 18 or 24 months, depending on the plan they select, thereby making it easier for customers to afford expensive gadgetry.
Indeed, AT&T said that fully 90 percent of its postpaid smartphone sales in the first quarter used the carrier's "Next"-branded equipment installment plan (EIP), or were customers who brought their own devices to the carrier. That's an impressive figure, considering AT&T only introduced EIP pricing a few years ago; previously the carrier only sold devices under a subsidized model through two-year service contracts.
Over the past several years, wireless carriers have worked carefully to finance the cost of EIP plans, since they don't immediately receive the full payment for customers' devices. "We continue to find ample demand and great rates in the securitization market to help us manage our Next receivables," said AT&T CFO John Stephens on the carrier's first-quarter conference call, according to a Seeking Alpha transcript of the event. "We have received about $1.5 billion in the first quarter, or about the same amount as last year's first quarter."
However, AT&T isn't the first wireless carrier to expand its EIP program to cover the cost of accessories. T-Mobile launched EIP support for accessories in 2014. Currently T-Mobile requires the accessory to cost a minimum of $69 and notes that customers may have to make a down payment on the accessory if it costs more than $250.
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