AT&T was the last of the major USA carriers to offer two-year contracts to subsidize phones. Verizon, for example, has a similar program, and is likewise nudging subscribers away from the two-year contracts by offering a bunch of perks for signing up on an installment plan. In June 2015, the company has stopped offering contracts for smartphones to customers through local dealers and partner retailers like Best Buy and Apple.
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AT&T is planning to introduce “a price simplification effort” that will apparently be the end of device subsidies and 2-year contracts. There is one exception to this “death to two-year contracts” sentiment that is running through the wireless industry.
It would be AT&T’s discretion to decide which customers will be able to get a phone replacement while their term is still on at $0 down payment. Apart from cellphones, the company has still not made it clear whether it will offer smart watches and tablets under a two-year contract or not. The new payment options apply to all mobile phones including smartphones and flip-phones. So let’s wait for the official announcement from AT&T before making any plans. It’s how consumers are able to buy an iPhone for $200 when it comes out every year, and oftentimes, how carriers can sell older phones for “free”.
AT&T will now focus on their “Next” offering which will allow customers to upgrade their device with no commitment. While the impending changes will apparently be applicable to all phones (including feature phones) bought in individual capacity (IRU account), contracts will still be available for corporate (CRU) accounts, as per the leaked memo. Instead of the carrier subsidizing the cost of a phone, users will have to buy the phone outright or pay for it in installments.
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Even after the payments were cleared, you would still need to keep paying the same rate for the plan only, till you upgraded to the new phone. It was unclear how much you were paying each month for your phone and how much you were paying for your service. “This does not apply to business customers under a qualified wireless service agreement”.
