AT&T is planning to introduce “a price simplification effort” that will apparently be the end of device subsidies and 2-year contracts. Starting January 8, new and existing AT&T customers will have to pay the full price to get a smartphone or choose AT&T Next.
“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.”
This change applies to all phones that the carrier sells, which include smartphones as well as basic phones. Though some business and corporate customers will still be able to avail discounts on 2-year contracts.
To recall, it was in late 2013 when we first saw carriers shifting away from 2-year contracts and phone subsidies. Back then, T-Mobile started introducing plans making customers pay for their devices up front or in monthly installments, filtering out the cost of the device. Followed by T-Mobile was Verizon, who began removing its 2-year contract plans for new customers.
Notably, AT&T approach towards contract implementable is rather stringent as it won’t allow existing customers to renew their contracts once they expire. As opposed to Verizon’s where existing customers can still carry forward on their contracts. The move had been a long time coming, as in June 2015 AT&T thwarted Apple and other third parties to eliminate the option to purchase AT&T phones on a 2-year contract.
Hence, it’s time we say goodbye to subsidies and “value for customers” as AT&T will ditch all 2-year contracts on January 8.