In Pitched Battle With Rivals, Sprint Ditches Two-Year Contracts

Photo (cc) by MLazarevski

Two-year customer contracts were once the standard for U.S. wireless carriers. How times have changed.

Wireless customers signed the long-term contracts in exchange for a discounted price on a phone. But that model is going away. Sprint just announced it is phasing out two-year contracts by the end of the year, in favor of leasing smartphones to customers, The Wall Street Journal reports.

T-Mobile ditched contracts more than two years ago, while Verizon adopted a no-contract stance earlier this month. AT&T is now the sole U.S. wireless carrier that still offers two-year contracts.

“The new model does away with early termination fees for canceling service but requires consumers to pay any remaining balance for the devices if they change carriers before it is paid off,” U.S. News & World Report explains.

Sprint also just unveiled its iPhone Forever plan, which allows customers to pay $22 per month to lease an iPhone, and allows them to upgrade to the newest version of the iPhone when it becomes available. This is an improvement from Sprint’s current iPhone leasing offer, where customers are eligible to upgrade to a new iPhone every two years.

“This change by Sprint effectively means that subsidized devices are finished at the top-tier carriers,” Brian Haven, a senior research analyst on mobile phones at the International Data Corporation market research group, told U.S. News.​ “There is a chance that smaller carriers will continue to offer, but I think that fact that the major carriers are discontinuing is telling of overall market demand.”

According to CNN Money, the demise of long-term wireless contracts could lead to savings for consumers as carriers try to beat each other’s deals.

“Sprint has gone on a price-cutting tear recently, severely undercutting the competition by offering to cut Verizon and AT&T customers’ bills in half if they switch, and offering the cheapest iPhone plan among the biggest four cellphone carriers,” CNN Money said.

But according to Forbes contributor Heather Newman, no-contract plans are typically best for loyal customers who don’t upgrade their phone often.

Newman warned wireless customers to read the fine print before opting to participate in a phone lease plan, because they could end up paying more for their monthly service than they did with a long-term contract.

The change effectively makes contract termination fees a sliding scale, instead of a firm $300-plus commitment. If you back out early, you’ll pay more. If you wait until the end, you’ll pay less, or nothing at all. The upshot is that while you’re not signing a contract, you’re still financially tied to the service, which is all the teeth a traditional carrier contract ever had.

Who is your wireless carrier? What do you think of the no-contract model for cell plans? Share your comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
10 Tools You Need for Financial Stability
10 Tools You Need for Financial Stability

Have these tools and accounts in place so you can weather whatever comes your way.

The Annuity Everyone Needs — and Anybody Can Get
The Annuity Everyone Needs — and Anybody Can Get

This simple strategy can put more money in your pocket during retirement.

25 Things You Should Never Buy — and What to Buy Instead
25 Things You Should Never Buy — and What to Buy Instead

If you really want to save money, become a more intentional shopper.

9 Everyday Problems You Can Solve With Vaseline
9 Everyday Problems You Can Solve With Vaseline

Forget expensive specialty products. Good ol’ petroleum jelly can address many common annoyances.

19 Things You Should Never Buy at a Grocery Store
19 Things You Should Never Buy at a Grocery Store

These household necessities are overpriced at the grocery store. Get them cheaper at these places instead.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

Why Cloth Masks May Increase Your Coronavirus Risk
Why Cloth Masks May Increase Your Coronavirus Risk

A new study finds that wearing a cloth mask can backfire if you don’t clean it properly.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.