During the early summer of 2015, Verizon Wireless made headlines by effectively axing its two-year contract pricing structure, a staple of which included generous subsidies on even the most premium of smartphone handsets available, in exchange for signing on the dotted line for two-years worth of service.
Surely enough, this abrupt shift in the telecommunications industry created a sort of ripple effect, as Sprint followed suit shorty thereafter Big Red’s announcement. AT&T, however, for its part, remained quiet in regards to whether or not it’d be employing a similar change in its business model.
That is, up until just recently …
As first reported by Engadget, in a memo sent out to AT&T employees late last year, the 2nd largest wireless carrier will also be joining the other three, officially announcing a similar plan to axe its two-year contract pricing structure effective January 8th, 2016.
As you might imagine, beginning on that day, new and existing AT&T customers will no longer be offered the option of signing up for a two-year contract; but instead will be given the choice of either paying full price, out-of-pocket, for their chosen device, or, for qualified customers, buying a device under the terms of AT&T’s Next program — wherein it can be paid for in 24 monthly installments at 0% interest, as is the “new norm” with carriers across the board.
Unfortunately, this transition also means that, even once your existing AT&T contract ends, you will no longer be eligible to sign on for an extension.
It’s not known, at this point, whether or not the new changes will effect AT&T’s growing line of tablet and wearable devices, however, which are typically marketed under the two-year contract pricing model. But, as you can see from the internal document screenshot above, AT&T’s axing of the two-year pricing structure is certain to apply to all smartphones and quick messaging/feature phones activated on the carrier’s network.
Shortly after the news broke last week, AT&T went public and reinforced its impending move with an official statement sent in en email to Phonescoop:
“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. Starting January 8, AT&T Next will be the primary way to get a new smartphone at AT&T. This does not apply to business customers under a qualified wireless service agreement.”
So there you have it, straight from the horse’s mouth …
What do you think about AT&T joining in on the no-subsidy model with the others? Does their service still seem appealing to you? Let us know in the comments below!