Wireless carriers love to advertise “free phones” like the iPhone 17 Pro. You’ll see offers that say “On Us” or “Get the latest device for $0”. But here’s the reality: these phones are not truly free. Whether you’re with AT&T, Verizon, or T-Mobile, there are hidden details you won’t see in the flashy ads — especially taxes, upgrade fees, and how the credits actually work.
Taxes Are Always Due Upfront
Even if the carrier says the phone is free, you still have to pay sales tax on the full retail price of the device. For example, the iPhone 17 Pro 256GB has a retail price of $1,099.99. In Florida, that means taxes of about $77+ are due right away — either upfront at the store or they’ll appear on your first bill. This is never mentioned in ads or TV commercials.
Upgrade & Activation Fees
Another hidden cost is the carrier upgrade fee. For AT&T business customers:
- $35 upgrade fee applies on devices financed with installments.
- $50 upgrade fee applies on devices purchased with a 2-year contract.
- New lines: AT&T currently waives activation fees on all new business lines.
How the “Free” Promotions Work
- AT&T: As of September 2025, AT&T offers the iPhone 17 Pro free with an iPhone 13 or newer trade-in. The $1,100 credit is applied as monthly bill credits over 24, 30, or 36 months. Cancel early? You owe the remaining balance.
- Verizon: Similar deals apply. For example, the iPhone 17 Pro or Galaxy S25 is “free” with a new line on an unlimited plan, but the credits only apply if you stay for the full 36 months.
- T-Mobile: Requires a qualifying high-tier unlimited plan (e.g., Experience Beyond). The free phone is spread over 24–36 months of credits. Leave early, and you get billed the remainder.
Why They’re Not Truly Free
- The full retail cost is financed upfront.
- Monthly credits are applied slowly to offset the installments.
- You’re locked into a high-tier unlimited plan for years.
- Taxes on the full price and upgrade fees are always due.
Installment Options for AT&T Business Customers
AT&T business customers can choose 24, 30, or 36-month installment terms. For the iPhone 17 Pro 256GB:
- 24 months: Higher monthly payment, but you finish faster. I recommend this for businesses trading in an iPhone 13 or higher.
- 30 or 36 months: Lower monthly payment, but you’re locked in longer. Cancel early and the balance is due immediately.
➡ For a full breakdown of installment vs. 2-year contracts, see my guide: 24-Month Smartphone Financing for Businesses.
Bottom Line
Carriers aren’t lying when they say “free phone,” but they’re not telling the whole truth either. You will always pay taxes and upgrade fees upfront, and the credits only cover the cost if you keep the line active for the full term.
Looking for different takes? See the consumer summary on MobileWiseGuy.com or the bold exposé on GangsterMobile.com.
