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.

2-Year Cellphone Contracts Are About to Go Extinct Photo (cc) by JeepersMedia

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.

Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More


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