Dec 05, 2021 Last Updated 00:05 AM EST

Tech

AT&T to end two-year contracts on January 8th

Jan 01, 2016 05:43 AM EST

AT&T is going to end the two-year contract at the start of 2016. The number two US carrier will soon phase out offers, under which consumers can purchase, or upgrade to, a new smartphone under a subsidized agreement. Now the customers can purchase smartphones only through the company's Next installment plan or by buying devices outright. This policy is set to take effect Jan. 8 after which, two-year contracts will not work - at least for regular consumers.

Engadget, which was first to report that news says that, this isn't just for smartphones, but for all of AT&T's phones including flip phones and non-smartphones with keyboards (what AT&T likes to call "Quick Messaging Devices") must be bought outright or with an installment plan. This also applies to AT&T employees with a plan with the company. It is not clear if the company will phase out offers for the Samsung Gear S2 and tablets, which are currently sold (and promoted heavily) with two-year contracts. It is possible that AT&T will keep multi-year contracts around for large corporate accounts.

AT& says that the change is being made for the sake of aligning the service offerings with customer and industry trends.

IB Times says that Verizon closed the contracts for new customers in August. Sprint also planned to shut down the contract model by the end of 2015, but so far the service option is still available to customers. While other smaller carriers like T-Mobile have already bailed on the multi-year contract model, AT&T has been slower to act.

Not only wireless carriers, but other technology companies have also moved towards installation model. In September, Apple unveiled its iPhone upgrade program during the launch of the iPhone 6S.  The program allows customers to pay monthly installments for their device and upgrade to the latest iPhone on a yearly basis.

The Verge says that the company will provide subsidized two-year contract upgrades for corporate accounts. Earlier this year, the company stopped offering contracts for smartphones to customers through local dealers and partner retailers like Best Buy and Apple.  Leaving the costumers to sign up for or renew them on the company's own stores and website. The option to ink a contract now remains for people who bought basic phones or went straight to an AT&T store and asked specifically for a contract extension.

 AT&T's Next has taken a good step as the two-year contracts that were the industry norm before T-Mobile went off course and ditched them. Over time, everyone else has followed. But the people who had those contracts could keep them and still get subsidized phones if they wanted - an option that won't be available to AT&T customers.

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