A training document obtained by Engadget indicates AT&T will stop offering two-year contracts and also drop device subsidies on January 8, 2016. The change, part of a “pricing simplification effort” by the wireless carrier, means new and existing AT&T customers will be required to pay full price for a smartphone, or via an AT&T next payment plan.
Just to be perfectly clear, this move applies to all of AT&T’s phones. Once the new year rolls around, even 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.
At this point it is unknown how AT&T will handle other devices, such as tablets and smartwatches, or how corporate accounts will be handled going forward. AT&T will announce those plans at a later date.
Carriers have been slowly moving away from phone subsidies and two-year contracts for awhile. T-Mobile was the first to introduce what it called its “Un-carrier” payment plans in 2013, and Verizon followed in August 2015, eliminating its two-year subsidized plans for new customers.
While Verizon allows existing customers to renew two-year contracts, AT&T will not be allowing existing customers to renew their contracts when they expire.