2-Year Cellphone Contracts Are About to Go Extinct

AT&T will stop offering subsidized telephones in the new year, and the move will mark the end of an era in cellphone service. Find out more.

There will be no more subsidized cellphones for AT&T customers in the new year.

The wireless carrier is nixing two-year contracts after Jan. 8, Engadget reports, citing an internal document sent to employees on Wednesday.

As a result, smartphones and other cellphones must be purchased outright via either what AT&T calls its “no-commitment (full retail price),” or via an AT&T Next monthly installment option.

AT&T spokesperson Fletcher Cook tells USA Today in an emailed statement:

“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.”

The internal document describes the new phone purchase options as part of a “pricing simplification effort.” It’s unclear how tablets and wearable devices like smartwatches will be affected.

The decision by AT&T marks the end of a cellphone era. According to USA Today, AT&T was the last major U.S. wireless carrier to still offer two-year contracts.

T-Mobile nixed contracts more than two years ago, and Verizon and Sprint announced in August that they would stop selling them.

If you need help finding a new cellphone or plan — regardless of whether you are an AT&T customer — be sure to visit the Money Talks News Solutions Center.

How do you prefer to purchase cellphones? Let us know below or on our Facebook page.

Stacy Johnson

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