AT&T to stop offering two-year phone contracts next month

By , Dec 30, 2015

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AT&T plans to stop offering two-year phone contracts next month, reports Engadget. The outlet on Wednesday published an internal document that says the carrier will launch a “pricing simplification effort” on January 8 that will effectively get rid of contracts.

According to the document, starting on the 8th, AT&T Next and full-retail will become the only purchase options for smartphones. Folks looking to buy a flip, or “basic,” phone from the carrier will also have to choose between paying full-retail or an installment plan.

To be clear, AT&T says the changes are for “Individual Responsibility Users,” so it’s likely it will continue to offer multi-year contracts for corporate accounts. The note also doesn’t say anything about devices like tablets or wearables, which are currently subsidized.

If this all holds true, the move won’t be surprising. Carriers have long been trying to push customers away from the contract/subsidy model, and towards monthly installment plans (Jump, etc.), which are less complex and require less up-front capital from providers.

AT&T is also expected to raise the price on grandfathered unlimited data plans in February.

Source: Engadget

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  • Jack Wong

    I believe the installment plan has replaced contract plan.

  • Blip dude

    So what does this mean for those currently on a contract?? I guess it’s time to give AT&T a call and figure out how to annull these contracts. I remember being able to do it a few years ago by upgrading 2 lines with AT&T next 6 month early. Let’s see if I can make that happen again.

    • Your contract is still valid until the end of it, and if you’re an enterprise user, you can still get 2-year contracts.

  • Jon20

    Complex??!!… What’s so complex about renewing your contract every 2 years and getting a new phone for $200. These Jump, Next…etc are more confusing. I remember when iDB first started posting these plans and many people would comment, confused about how they work. It’s just to benefit their bottom line.

    • Melvco

      *less complex for carriers, which the article could have been more clear about. If you ever come across a paper version of a wireless agreement, try reading through the legal text. Contracts are not fun for anyone trying to enforce them.

      • Jon20

        I’m sure it’s inconvenient for them. So what happens now because I’ve been on the 2 year contract for a long time?

    • Blip dude

      It’s complex when you try to terminate the contract while keeping the service on but can’t because the only way to pay off the contract early is by terminating the service altogether. Now that’s really f****** stupid. So in a sense, it’s complex on both ends, because I now have to figure out a way to annull my contract while still keeping the service on. Was it stupid on my end?? Definitely, but at least it’s an issue I won’t be making again in the future (not that I can make it again anyways).

  • Mark

    Which is why I left them 5 months ago. And I don’t miss them.

  • Either way you’re still stuck for 2 years.

  • Jose Carlo

    I have no idea why people prefer to stick to the full price cost with the ATT “Next” crap instead of a one-time $200-300 fee and the phone is completely yours. It’s just stupid.

    • Lance Baker

      Because you end up paying more for the phone than the full retail price in almost all situations. You get a $15 or $25 dollar credit on your actual service charges (depending on the plan) when on NEXT.

      • CryptoCoin420

        Lance Baker, are you saying you pay more when you do a contract vs getting on the NEXT plan? I would love to see a break down of your analysis. AT&T is financing these phones. It is not a “better” deal. AT&T is locking people in and like on my moms phone she is locked in for 30 months on the iPhone 6s at $25 extra a month for the installment plan. How is this a good deal? If she wanted to get a new phone at 24 months, like most people do, she will have to get the NEXT program again and roll the new phone into the new NEXT installment plan and tack that whole balance onto her current next balance (6 months @ $25 dollars = $150) Its a never ending cycle for people who cannot afford to pay the full retail price. IDK seems like a RIP, and AT&T already got me, my wife, my mom all on the NEXT program. Although my wife and mine are different we pay 31.25 a month per device for 24 months. Not sure what the deal was with my moms, but she is getting screwed.

      • Lance Baker

        The remaining balance of the phone doesn’t roll over to the next one. The rest of the payments disappear as long as you trade the device in for the next one. If you have a plan with 10GB or more then your device fee on the rate plan of $40 becomes just $15. That’s a $25 dollar difference. So if you do the 2 year contract your rate plan is $25 higher. That’s $600 dollars. Then you factor in how much pay for the phone. A 64 GB iPhone 6s will be $299.99. That’ll be $899.99 that you’ve paid for the device over a 2 year period not including taxes and a $45 upgrade fee. The full retail price of that phone $749.99. So yes, you actually pay more for the device on the cost of the service. Plus you’re stuck with that phone for : years unless you buy one for full price or do an early upgrade.

      • blu

        But they then charge you and access fee, equal to that “credit”.

        Next is a ripoff for the consumer that has a older contract price plan.

      • Lance Baker

        Can you explain what the access fee is that is equal to the credit? I’m curious. Because there isn’t one.

      • blu

        My mistake. The plan is so convoluted it is hard to figure out exactly what is and is not being charged for.
        I went on the site again to see how much it would cost me and I think I figured it out.
        There is a $40 access fee for each device (what is this charge anyway? Aren’t you already paying money for a plan, then you have to pay to have access to it?) then you get a discount of $15 or $25 depending on plan chosen.

        Regardless, even the cheapest plan is $100/month for 2 phones, plus I have to pay for the phone. So my annual price goes from $1400 ($100/month + $200 for the phone) to $1850 ($100/month + $650 for the phone). Yes I get unlimited talk and text now (who cares, I use 150 minutes or so a month and do not text at all), but get less data on my end (I use 4-6 gigs a month, my wife may use 50mb), but I get to pay $450 more per year for it, as well as having to worry about my data useage.

      • Lance Baker

        It really isn’t that convoluted. You pick a plan which has a base price. Any device you add to it has it’s own fee. These plans are designed for multiple devices. For instance, I have a 5 GB plan which starts at $50. Then my phone is $25 and my tablet is $10. That’s my rate plan. $85. Phone is on NEXT 12 and I brought my own tablet so there isn’t an installment for that. Obviously this isn’t a viable solution for everyone. That’s why there are choices and no one is making you use services by AT&T. This however works for me.

      • blu

        I was going to say the cheapest was $100, but that is what showed initially, you have to click the “show all plans” or scroll left and right to see the other ones. The $70 one is only 300 mb shared between 2 phones, a pointless plan for me and pretty much anyone else.
        Let me clarify, the cheapest plan that would work for me is the 5 gig plan.

        And it is convoluted.
        5 gigs and under give you $15 off the $40 access charge.
        10 gigs and up give you $25 off the $40 access charge.
        Then you have the base rate, again, depending on what your data choice is. The you have the phone cost, and that depends on the Next 12, 18, 24, with $195 down payment and 28 payments, or bought outright.

      • Lance Baker

        I will agree that the old rate plans aren’t designed for NEXT. This makes sense since it wasn’t even a thing back then. This is a way that AT&T is trying to get people to switch. When so many people are on a network it just doesn’t work for a company to offer unlimited data. People seem to be under the false impression that running a complicated cellular network with towers all over the nation (that the government/state/cities have to approve in the first place, meaning the company just can’t put one anywhere) is a simple task that doesn’t cost the company money. And then these people go to a website and complain about being over charged and ripped off when it’s fairly common knowledge that Apple devices are rather pricey and people say the same about that. So….. Yeah.

      • blu

        Yes, totally a way to get rid of those plans, and will get rid of a lot of them.

        I know that running a cell system costs money, and the subsidized phone can lose them money, but it also helps keep customers. I have no idea if the $100/month I give them makes or loses them money, but for the little I use it, I am positive they are making a profit off me and those like me. As for subsidies, it is the main reason I have not left AT&T. Without this subsidy, I am much less likely to stay with AT&T. While I as a single user really don’t matter in their grand scheme, I am sure I am not the only one who will be leaving them.

      • Minnesota Fats

        My 2 year contract plan with 450 minutes, unlimited data, and unlimited text is $65 a month. I trade in my old iPhone every two years and pay only $40 for an upgrade fee. Then set for 2 years.
        I’m afraid you are wrong. NEXT and Mobile Share are a ripoff!

      • Lance Baker

        Older style individual rate plans weren’t really a part of this conversation. Those were done away quite a while ago. But yes, in your case, that works for you. Hopefully you won’t ever have to add someone to your plan. I had that same exact plan years ago and it came out to $89.99 before tax. You must have some special rate plan or a good discount.

      • Minnesota Fats

        I thought about adding a line, but now I will just use Cricket for an extra line.
        Special rate plan with a discount, yes.

    • Blip dude

      Because unfortunately, I took the stupid route of going contract and now that I wanna get out of it, I can’t do it unless I cancel service altogether and lose my number. My only other option at this point, according to AT&T themselves is to move my number to a different carrier for a month and then revert back to AT&T. What a pain in the *** process that it. With AT&T Next, that isn’t the case at all, and then my bill actually gets lowered after paying off the phone early. The only other option is to annull my contract by upgrading to another phone with AT&T next. The issue with that however, is that I already own a iPhone 6S Plus!!!

  • ridonkulous

    Now that more and more people will be paying full price out of their own pockets, they won’t be as apt to upgrade every year or two. Basically all this hurts is phone manufacture with people holding onto their devices longer and longer. Less unit sales are coming down the road for apple and samsung.

  • blu

    Yes, thanks t-mobile for screwing me.

    I was paying $100 month for 2 phones, 400 minutes, unlimited data and 200 mb data. I got a new iPhone for $200 (or less) every year.
    Has worked perfectly for me for 7 years.

    I now will be paying almost double that with the loss of my subsidized contract.

    Screw you T-mobile and your crappy service.

    I am hoping since I have a FAN with work that I fall under the corporate account umbrella and can continue with my current plan and upgrade for a subsidized price.

    • David J Delgado

      Thank you T-Mobile for allowing me to upgrade 3 times a year, have 2 lines for $100 unlimited everything and not have to lock myself down to any carrier for 2 years. If you’re getting screwed, maybe you should reevaluate your current plan.

      • blu

        And how much does each upgrade cost?

        I could care less about being locked to a carrier, I have been with the same one since 2006 since my cost was what I liked for what I got.

      • soundmanbrad

        I agree, it’s time to switch. It’s your power as a consumer. Switch to better companies to make them more successful. Maybe ATT will notice and then have to be more competitive in the future. I’ll tell you this, ATT looks for any reason to raise rates.

  • Dao Sasone

    I dont understand why att wanna follow other carriers. Be different for a change. 2 yr contract suits alot of people including me. Why would i wanna pay full retail? Definitely seeking an alternative Carrier if i cant do
    2 yrs anymore.

    • Merman123

      It’s playing with numbers man. It’s essentially the same thing…

  • JulianZH

    Damn this suck. 2 yrs contract is the cheapest option….

  • Stalin

    At this point its only for NEW customers, they haven’t make clear about existing customer. but it won’t be a surprise if they stop offering to them too.