They boast a no down payment, no activation fee, no upgrade fee and no financing fee however there is financing. A low monthly installment is added to your bill. See step two below.
Here's what they say:
Step 1: Choose any one of our latest smartphones or tablets.
You only pay taxes up front and there's no down payment or
activation fee.
Step 2: A low monthly installment plan is added to your bill. (This is the part that increases your monthly bill instead of doing a 2 year contract)
Step 3: Any time after 12 months, you may trade in your device
for a brand new one! Or choose to keep the device and, after
20 months, no more installment payments are required.
Fine print:
*Requires 20-month 0% APR installment agreement & qualifying credit. Wireless service req. (voice & data for smartphones/data for tablets). If you cancel wireless service, remaining balance on device becomes due. Sales tax due at sale. Qualifying devices only. Upgrade after 1 yr.: Req. min. 12 installment payments, acct. in good standing, plus trade-in of current device in good & functional condition & purchase of new device/wireless agreement & service plan. After upgrade remaining unbilled installment payments are waived. AT&T Next available only at AT&T owned retail stores & att.com. If device is returned, restocking fee up to $35 for smartphones or 10% of tablet sales price may apply. Terms subject to change.