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AT&T is Killing 2-Year Contracts on January 8 (Updated)

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AT&T won’t offer 2-year contracts to existing or new customers come January 8. The news comes via internal documents sent to Engadget, but we can independently confirm the change as it was relayed to us over a week ago from a source. 

According to leaked documents that have gone out to AT&T employees, AT&T Next and full-retail purchases will be the only options for upgrading to new devices going forward. And again, this is for both current and new customers. AT&T is only saying that this is a “simplification effort.”

The change has both good sides and bad. For one, this gets you out of contracts and in more control over your service because you can pay off devices quicker if you’d like and move on from AT&T, should their service not be up to your standards. But this isn’t good for those who enjoyed grabbing new phones for a one time price of $99 or $199, instead of taking on a monthly payment plan.

AT&T first killed 2-year contracts with its 3rd party outlets back in June, which was news we first reported, so it only makes sense that their official stores follow along.

The documents do not say if wearables and tablets will switch over to similar payment plans, but our source thinks they’ll still have contract options. We’ll have to wait for AT&T to confirm that.

UPDATE:  According to our source, 2-year contracts will still be available for tablets, wearables, Internet of Things (IoT) devices, and mobile hotspots. They will also remain available for CRU and custom IRU accounts, which are also known as corporate/business accounts.

On a related note, AT&T seems poised to make that basic/feature phone of yours even tougher to keep, as they are raising the monthly access fee on 300MB, 2GB, and 5GB data plans for basic phones from $20 per month to $25.

UPDATE 2:  Official word out of AT&T on the change is as follows.

“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.”

Via:  Engadget
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  • TheUI

    The misinformation surrounding this topic is mind boggling. Even major news outlets are spinning it to imply that somehow the carriers are the ones who decide how much your phone costs.


    …f’ing first world entitlement.

    • A Person

      this FALSE! I have been a long time ATT customer and always had the basic 2yr contract. my contract expired in October, but my bill did NOT change by one cent. I am paying the same amount now as when ATT was subsidizing the phone. this new financing plan is NOT a good deal for consumers. its actually a total ripoff. you now pay 100% of the cost of the phone and your service bill is no cheaper. in fact, i checked on the ATT site yesterday about upgrading and it even stated “instant savings of $450 for signing up for a new 2yr plan”. coincidentally, that is now gone from the ATT site as of this morn forcing me to go into the actual store to complete this upgrade. in the end, what this means is that somebody is making $450 profit directly from the consumer for this new “benefit” of financing the phone… this is NOT a good thing…

      • TSON1

        Just because your bill didn’t change a cent doesn’t mean that they didn’t charge you more the whole time. Do you really think a company can survive handing out millions of 500 dollar phones for a dollar if they aren’t making the money back somehow? AT&T next DOES have you pay, potentially, more money, but the big fat discount you get for being on it will usually completely wipe out the increase. You just simply know where the money is going now, versus seeing a 40 dollar ‘line access fee’.

  • Keith Taylor

    Well this sucks

  • MasterSoup

    ATT Next and all similar programs are essentially contracts anyway and the monthly payment equates to the same amount anyway. I’m paying the same amount being contractless on T-Mobile while paying for my S6 as I had on ATT paying monthly for a contract and an iPhone.

    Along with the fact that I forked over $200 up front on both carriers for phones.

  • Meh

    I wonder if it’s going to be like Verizon. All the hullabaloo about no more contracts and they’re still very much available.

  • Wolf0491

    Awww. The only thing I used at att was random free upgrades whenever I had to send my phone in for like warranty repair haha. Got free LG g3 last year. Otherwise I just buy unlocked

  • I thought they got rid of 2 year contracts a while ago. I always see headlines for this………..

    • View From The Top

      Nope. Verizon did it earlier this year, T-mo did it back in 2013 (Un-carrier 1.0) and Sprint is believed to do it in H1, 2016. There were reports that AT&T were looking into killing off subsidies (and hence, contracts). Now however, looks like they’re actually going to implement it. 🙂

      • Diablo81588

        2 year contracts are still available on Verizon for existing customers. Just renewed mine a month or so ago to lock in my unlimited data price.

        • View From The Top

          Yes, they are, but only for those not opting to get a new handset. To the best of my understanding, those buying a new device won’t be able to sign a traditional two-year contract.

          • Diablo81588

            I renewed mine by upgrading my phone. Not sure what you mean.

          • It’s still possible for existing customers AFAIK.

          • ultravisitor

            I’m not sure what in the world you’re talking about. Why on earth would someone sign a new contract and NOT get a new phone?

            I signed a new contract in September AND got a new phone.

  • DC_Guy

    I wonder what this means for unlimited data plans and transfers of billing responsibility? I have one that I was looking to sell on eBay next month. LOL

    • MvP77

      Being a T-Mobile customer I can tell you selling and buying used is a bit tricky. When buying a phone you gotta make sure its fully paid off. If not and the person you bought the phone from cancels service the phone will become blacklisted and unable to be activated.

      • DC_Guy

        Yes, but I’m talking about the plan, not a phone.

        • RiceCake

          Hmm I may be interested in that plan.

        • stayflyer

          I’m interested

      • Mele Kalikimaka

        Meth, not even once.

        • MastermindDrew

          I too, have never done Meth

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  • BobButtons

    The thing I hate about the payment plans is they advertise a bill ‘discount’ while you’re paying off your phone that goes away once your phone is paid off unless you get another one. In reality, what they’re saying is this is your bill with your monthly payment and as soon as your phone is paid off your bill will get jacked up to match so you keep paying the same amount even with a phone that’s paid off. Why not just say this is your bill whether it includes a phone payment or not? Guess that’d be too honest….

    • nkd

      Are you really saying when phone payment fall off your bill goes up? If so that is far from true! Payment drops off and that’s all there is to it. I have no idea what you are trying to imply.

      • BobButtons

        See my other replies.

    • patt

      once your phone is paid off on at&t or verizon. You get out of contract discount either 15$ or 25$. Yes the bill goes down because you don’t have phone payment after it’s paid off in 24mo or by yourself earlier at any time you want.

    • Wow could you be anymore wrong?

      The line discount is what you receive when you are out of contract. Since AT&T Next is a no contract way of doing your phone upgrades, you will always have the line discount. The only thing to change is that the phone installment falls off making your bill go back down.

      • BobButtons

        Just replied to another comment, this was the case last time I looked into it. They said the discount was only valid while on the phone payment program (Edge) and that when the phone’s paid off I either had to make payments towards a new phone or leave the program making me ineligible for the discount.

    • jnt

      As has already been stated, the discount remains, even if you bring your own device to start and never get on a device payment plan.

      • BobButtons

        Then it’s changed since the last time I’ve considered them. They said you get the EDGE discount of $20 while on the program to offset the $20 phone payment. I asked what happens when the phone is paid off and they said, either start payments towards a new phone or leave the Edge program, making the discount not valid anymore. If it’s changed then I stand corrected but it was valid with the last information I had.

        • patt

          Edge is now called Device Pament. As soon as device is paid off either by itself or by you. You get month2month discounts.

        • jnt

          I think the reps had some confusion, at least with Verizon, early on with that program. I remember being told the same thing, and then once I was done with the Edge payments, they called the discount something else and added it back on. So that might’ve technically been true, they just neglected to mention that “other” discount could be added (if that makes any sense… lol)

        • hike15

          Verizon offers a month to month discount if you aren’t using edge or contracts. My family has 4 phones, with 2 being month to month, 1 edge, and one contract. The m2m are cheaper than the other two.

    • glimmerman76

      ATT does not take that discount away if you pay off the phone. I have 2 next agreements that are paid off the lines still get there 25 dollar discount.

    • View From The Top

      No-contract bills have three parts apart from taxes. Plan charge, device charge and access fee. You plan charge is what you choose and will be the exact same for everyone. Access fee depends on how many add-on devices/connections you have. Typically, a phone is $10-$20, a tab is $5-$10 and a wearable is $5. Depends on how many you choose to tack on.

      Device charge is what you pay ONLY if you buy the phone from the carrier at zero (or low cost) upfront. If you pay off the full price (typically $600 – $900 for high-end phones) upfront or buy an unlocked device (compatible with every carrier in the country) from Amazon, Newegg etc. you do not have that third element added to you bill from the first month itself. It you choose the zero-upfront scheme, you’ll pay //device price divided by 24// per month for two years as device payment. That’s all there is to it.

    • 21stNow

      This article is about AT&T. Bringing factors in that only apply to Verizon Wireless customers without specifying which carrier you are referring to will cause the confusion that you see in this chain.

      • BobButtons

        My information was obviously outdated but applied to both at the time. The connection was the device payment plan which relates to the article.

        • 21stNow

          AT&T never took the discount away if you paid off your Next plan. You only lost the discount if you signed a two-year contract. AT&T and Verizon Wireless were different in this respect at one point in time.

  • Jeff C

    My question is did the price of phone plans ever stabilize once all these companies went away from subsidizing phones? Wasn’t the whole reason people overseas bought their phones outright was because phone plans were cheaper because there was no subsidization?

    I’m still on a family, unlimited data plan so I’m ignorant.

    • nkd

      Yea price is way cheaper if you have your own phones and just pay for service.

    • The difference with your plan is it was built with phone subsidies in mind so there is no break on your plan when you go out of contract.

    • Adil Tajgeer

      yes, for AT&T at least, you get a $25 bill credit on your service if you byod. not crazy low, but it’s a discount.

      • RiceCake

        Yeah if my parents would do edge they would be paying literally nothing right now since they both never get new phones.

    • michael arazan

      The carriers aren’t going to drop the price of the phone to give you a deal, they don’t do anything for customers. Telecoms are the most ruthless of business’ now in screwing over the customers.

  • Craig P

    Any word on AT&T for Enterprise 2 yr contracts?