AT&T just announced an upgrade to its in-store smartphone trade-in program, offering instant credit of at least $100 for devices less than three years old.

More recent and valuable smartphones, meanwhile, can grant owners even larger credits. The new upgraded program comes in effect today, May 1. Sprint was already offering a $100 smartphone credit to entice consumers to port their numbers to its network, and AT&T apparently aims to fight back.

Under the new AT&T Trade-In Program, turning in an old smartphone will get consumers at least $100 toward their next smartphone. This translates to half the up-front contract price of a Samsung Galaxy S4, HTC One or entry-level iPhone 5.

AT&T insists that the $100 credit is the minimum, i.e. if the smartphone is worth more it will increase the credit amount accordingly. Once customers turn in their old smartphone for evaluation, they have three options to use the credit immediately: put it toward purchasing an accessory, use it to pay an existing bill, or donate it to AT&T's charitable cause Cell Phones for Soldiers. AT&T will accept any smartphones that are less than three years old and are in good, working condition. The smartphone can even be from another carrier.

"Beginning May 1, consumers who trade in their current smartphone to AT&T will be eligible to receive at least $100 off the purchase of a new smartphone, including the new Samsung Galaxy S4, BlackBerry Z10 or 32GB HTC One. These devices are normally $199.99 with a qualifying two-year agreement but, with this limited time promotion, they will be available for $99.99," explains AT&T.

"The promotion applies to any smartphone AT&T sells, and gives customers access to the latest devices at a fraction of the cost or, in the case of smartphones priced under $99.99, for free."

While AT&T mentions that this is a limited time offer, it does not specify when it ends. It's an increasingly competitive cellular market, and carriers typically don't make money on hardware sales unless contract customers keep using their devices after the contract period expires. T-Mobile shifted away from this practice, branding itself as the "UNcarrier" and separating the cost of hardware and services.

AT&T's new promotion comes to challenge Sprint's $100 deal, and it's likely to attract more customers. AT&T currently has a considerably greater LTE coverage compared to Sprint. Moreover, the fallback service on AT&T's network is HSPA+, while Sprint's fallback is EV-DO. HSPA+ can be nearly as fast as LTE, but EV-DO tops around 1.5Mbps. Check out this link for more information on AT&T's trade-in program.