[smackfu]

And the second important thing is that if you are on a 10 GB or higher Mobile Share Value plan, an off-contract smart phone costs you $15 instead of $40.

https://www.att.com/shop/wireless/data-plans.html

So, on Next, you pay $27 per month for the phone, but $25 less for the plan, so $2 more a month or a total of $48. And you need to pay sales tax on the phone, so that's another $50 or so. But the contract plan had to pay $199 up front. So you come out about $100 ahead over the life of the contract.