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AT&T reportedly set to ditch 2-year smartphone contracts on Jan. 8 [Update]

Update: AT&T has sent over a statement that both confirms, as well as clarifies, the carrier's plans:

"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. Starting January 8, AT&T Next will be the primary way to get a new smartphone at AT&T. This does not apply to business customers under a qualified wireless service agreement."

Original story: AT&T looks like it is finally close to getting rid of the old-fashioned two-year contract plan for buying smartphones. A new report, citing a leaked internal document from the wireless carrier, says that AT&T will no longer offer such contracts starting on January 8 for smartphones.

The report from Engadget says that on that date, new and existing AT&T customers will have to pay the full price for a new phone upfront or pay for it using its AT&T Next installment plans. In addition, basic phones and "Quick Messaging Devices" from the carrier will also be under these new purchase options. It's not clear yet if products like tablets and smartwatches will also ditch two-year contracts.

T-Mobile has already done away with two-year contracts for its smartphones, but Sprint still offers them for its products. Verizon customers with current contracts can also choose to continue with that kind of payment plan.

Source: Engadget

I have been writing professionally about technology and gaming news for 14 years.

  • Makes sense. They have been pushing next installment type plans lately. You have to do the math, but buying upfront may be the better choice. Expensive, but I would have to look at the total package to see the cost. Next installment basically you pay sales tax, and any minor fees, and get a new phone. They are smart. They try to keep your monthly bill the same, but again, it may be cheaper in the long run to buy one outright. Sent from the iMore App
  • Actually it would be cheaper to use the Next Plan only if you don't plan on keeping the phone. But basically either way you'd pay full price, depends on if you want to pay it up front or pay it off in installments. With the Next Plan you can pay a cheaper price then swap the phone for a newer model and essentially start over paying it. So take the 6S 16GB up front: $499-$599, with the next plan ~$21/month @ 24 months you're eligible to trade in so it's about $520. With about a $40 down payment you'd be saving ~ $20. But this all depends on your wireless plan as well. Luckily I'm still grandfathered in so I won't have overages but I've found that you save a few dollars using the Next Plan since I'd have to pay full price up front to keep my grandfathered plan. But I'm interested to see all the specifics as well to make sure :) Sent from the iMore App
  • Actually it's not cheaper at all. The Next plan is still the same cost as the subsidized plan. How does that work? No matter how you get your phone you're paying a built in subsidy cost when you're on AT&T, Sprint, or Verizon. So AT&T's ability to let you get a new phone once you've paid half the cost on Next has actually paid the phone cost in full. T-Mobile is the only carrier to have truly removed phone cost from plan cost. Sent from the iMore App
  • Thanx TMobile ;)
  • So people like me who are grandfathered into the unlimited data plan get the raw deal. Our monthly charge does not change when the device is paid off or I bring my own device to the plan.
    So, if I am paying the same amount anyways, it makes sense for me to sign the 2 year contract and get the $400 or so subsidy on my device. Now, without the contract and subsidy, I'll be paying the full price for the phone and my montly cost will remain what it is now.
  • I'm on the unlimited plan. I'm not understanding this will effect me. I think this will cost me more a month I think right?
  • Good thing I switched to Sprint for iPhone forever. Sent from the iMore App
  • sprint. hAha. I wouldn't even tell people if I was on sprint. worst network ever Sent from the iMore App
  • Yep, may as well switch to tmobile if you're considering sprint. .
  • Tmobile has been expanding like crazy from what I have read.
  • AT&T still won't get me to switch from my Grandfathered Unlimited Data Plan by doing this. I'll just do Apple's Upgrade Plan and do their monthly installments and keep my old Plan; or I guess switch to more affordable flagship phones from Microsoft. Sent from the iMore App
  • Yeah, they overwhelmingly choose the Next plan because they're given no other options... What about those people who don't care about upgrading whenever the latest and greatest device comes out? I've had my iPhone 5s since launch day back in 2013 and it has served me great for over two years now. I am on a month-to-month with ATT now because I have no interest whatsoever in Next.
  • For people who are on a grandfathered plan and have a 2 year contract you are getting the raw deal. Let's say the subsidy brings the cost of the phone down to 199.99 - you're basically paying about $8.30 per month for the 24 months as opposed to paying $18.00-35.00 per month average on Next. People fight for your plan until they force you off, then switch to their pre-paid partner and keep your network and unlimited data. Posted via the iMore App for Android