re: so AT&T no longer offers discount on phones?

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For example why would i not rather pay $49 for a galaxy s4 be locked into a two year agreement than pay $25/month ($300 a year) for the same phone?

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Because when you upgrade your rate plan goes up $15-$25 per line per month. Technically it's not having the discount you get with AT&T Next and is the same plan they've had for years. If you go for older models you'd probably be better off buying a phone off Amazon or ebay. You get the $15-$25 per month discount of AT&T Next plus since you want older models you can probably save anywhere from $50-$200 on the cost of the phone.