AT&T to Ditch Two-Year Contracts on Jan. 8

Jan 1, 2016 6:04 PM by NBC News

AT&T, one of the last carriers to offer two-year phone contracts, is getting rid of them.

Starting Jan. 8, the company will stop offering two-year plans and instead offer "Next" plans, an AT&T spokesperson confirmed to NBC News

The company is the last holdout among the major carriers. Sprint, T-Mobile and Verizon ditched two-year contracts earlier this year.

What does that mean for consumers? Instead of the carrier subsidizing the cost of a phone, users will have to buy the phone outright or pay for it in installments. For those who choose the latter, they have a wide array of payment options.

The Next 18 plan, for example, lets customers pay off the latest iPhone in 24 payments of $27.09 a month — but they can upgrade to a new phone after only 18 payments.

In the old subsidized plans, there was no way to pay off your phone. If you didn't get a new phone after two years, you were just paying more money for nothing. Under the new plans, once you're done paying the installments, your monthly bill goes down.

"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," a company spokesperson told NBC News.

"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."


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