Updated on 12-30-2015 by Malarie Gokey: Added confirmation from AT&T that it will end two-year contracts.
After January 8, AT&T will sell smartphones at full retail price or through installment plans like its current Next program. Customers will pay monthly for a data plan and unlimited talk and text, but won’t have an obligation to keep the data plan, as long as they’ve paid for the phone.
“With $0 down for well-qualified customers, the ability to upgrade early and down-payment options available with even lower monthly installments, our customers are overwhelmingly choosing AT&T Next,” AT&T told Re/code. “Starting January 8, AT&T Next will be the primary way to get a new smartphone at AT&T.”
No further details were revealed by AT&T.
The new policy should, hopefully, make AT&T’s data pricing more competitive when compared to T-Mobile, Verizon, and Sprint. The wireless carrier is the last of the major four to remove two-year contracts, and if rumors are correct, it has been looking into it for the best part of this year.
According to the leaked document, flip phones and feature phones, named “Quick Messaging Devices” by AT&T, will receive the same treatment. Neither the document nor AT&T mentioned contracts for business customers, meaning two-year contracts might still be around for businesses.
Wearables are another potential area where two-year contracts might remain, especially since AT&T has been heavily promoting two-year contracts for wearables like Samsung’s Gear S2.
Once two-year contracts for phones are gone, so will the lower subsidized prices of smartphones. Customers will have to pay the full-retail price of the smartphone over a certain amount of time. All four of the major carriers currently offer 24-month phone installment plan deals for smartphones, but that may soon be the only option available to customers.
