AT&T to Stop Offering Two-Year Phone Contracts Starting January 8

Discussion in ' News Discussion' started by MacRumors, Dec 30, 2015.

  1. MacRumors macrumors bot


    Apr 12, 2001

    Starting on January 8, 2016, AT&T plans to introduce a "pricing simplification effort" that will see the end of device subsidies and two-year contracts. According to an internal training document shared by Engadget, new and existing AT&T customers will only be able to purchase a smartphone at full price or with an AT&T Next payment plan going forward.


    As outlined in the document, the new rules apply to all of the phones that AT&T sells, including smartphones and more basic devices, which will be paid for using new installment plans. More information on how AT&T will handle corporate accounts and non-smartphone devices like tablets and wearables will become available after an official announcement from AT&T, but it appears certain corporate users will be able to continue making two-year contract purchases.

    The shift away from two-year contracts and iPhone subsidies began with T-Mobile in 2013, when the company introduced its Un-carrier payment plans uncoupling device costs from plan costs. Verizon followed suit in August of 2015, debuting new smartphone rate plans and eliminating its subsidized two-year contract option for new users.

    Existing Verizon customers can still renew their two-year contracts, but AT&T's no-contract implementation is more extreme and will not offer existing customers the option to keep their contracts once they expire.


    AT&T has already been working on shifting away from two-year contracts by pushing its Next plans. In June of 2015, AT&T forced Apple and other third-party retailers to remove the option to purchase AT&T phones with a two-year contract, leaving customers with AT&T Next or a full-priced smartphone as their only third-party purchase options.

    Update: AT&T has confirmed its plans to stop offering two-year contracts in a statement given to Re/code.
    Article Link: AT&T to Stop Offering Two-Year Phone Contracts Starting January 8
  2. garirry macrumors 68000


    Apr 27, 2013
    Canada is my city
    I know full-priced phones aren't cheap, but contracts are so ****ing overpriced that they need to get removed eventually.
  3. 73b macrumors regular


    Aug 22, 2014
    East Coast
    "Pricing simplification" just means "Pricing increase"
  4. spiderman0616 macrumors 68040


    Aug 1, 2010
    I know a LOT of people that are still with AT&T on contract because they are still being grandfathered in to their unlimited data plans. I wonder if this is also going to result in the death of unlimited data.
  5. macintologist macrumors 6502

    May 3, 2004
    You're better off buying a used unlocked iPhone and getting service through a low-cost MVNO. I pay $27/mo including taxes for my iPhone plan through Consumer Cellular, and my iPhone is a gently used iPhone 5S which I paid half the price than getting a brand new one.
  6. macintologist macrumors 6502

    May 3, 2004
    I feel sorry for these people since they are way overpaying for their plan.
  7. KPOM macrumors G5

    Oct 23, 2010
    It was only a matter of time. Good thing I took one last advantage of a subsidized phone after the iPhone 6S came out. I guess between paying full price, not getting the $25 Next discount, and raising the price of the unlimited data plans, that's how AT&T is going to try to get the rest of us off UDPs.

    Not if you use tons of data. I never have to worry about overages. Also, AT&T has been upgrading lots of these (even the 450 minute plans) to unlimited voice and text, so after all the discounts it winds up being slightly less than a 5GB shared data plan.
  8. Zoboomafoo macrumors 6502

    May 22, 2002
    Yeah who wrote these FAQs? This is my ONLY question: Do I get unlimited interwebs still?
  9. jclo Editor


    Staff Member

    Dec 7, 2012
    I have an unlimited data plan but I've just bought my phone outright for the last two years. So unlimited data customers will still be able to keep their data plans even with two-year contracts ending.
  10. Zoboomafoo macrumors 6502

    May 22, 2002
    I've wondered if I'm actually doing that. But ... how do I calculate it? How do I check my data usage? :/ This feels like a pretty simple thing to figure out :)
  11. Waxhead138 macrumors 6502

    May 18, 2012
  12. stark93 macrumors member


    Sep 18, 2012
    That's the last straw for me… I'm dropping AT&T after my current contract.
  13. Leonard1818 macrumors 68020

    Nov 15, 2011
    darn. Verizon is soon to follow, surely. Bye bye subsidized phones equaling $900 every 24 months.
  14. Waxhead138 macrumors 6502

    May 18, 2012
    #14 general you're correct. Catch is for say a family of four to all have an Iphone as an example, that can get expensive on the monthly lease option, and god forbid you want more than 16gb. Single line? Sure, no brainer, lease it.

    IMO its easier to deal with subsidies on multiple line accounts (3+) but to each their own on that. I know I'm pretty much in the minority on that way of thinking now.

    *Edit - Easier to deal with due to having some flexibility.
  15. ToroidalZeus macrumors 68020


    Dec 8, 2009
    I've stayed on 2-yr contracts because they have been cheaper for me than buying the iPhone for full-price.

    The iPhone costs $650 retail (plus tax).
    I could always sell the iPhone for about $200 at the end of the 2 year contact.
    Subsidy was $450.

    So doing the math, I was always breaking even after 2 years. In other words I have been getting free iPhone upgrades for the last 6 years. Coupled with Unlimited data and it was a sweet deal.

    If the 2 year contracts were soo overpriced, AT&T would be making a huge profit from it and would keep them. The fact that they are getting rid of them shows that they were actually too good a value for the consumer.
  16. H2SO4 macrumors 601

    Nov 4, 2008
    Personally I don’t see the difference. A two year contract is the same as an AT&T pricing plan if of a different length. This is just to confuse customers.
    Whether I’m roped in for two years by the carriers, the banks or my next door neighbour - it’s the same. The only difference is that the ones that seemingly have more flexibilty are the ones that snare you for longer.
  17. Sasparilla macrumors 6502a

    Jul 6, 2012
    This is really a stunning change from AT&T. It shows how much the market has changed (as they were making alot of money off these plans previously).
  18. macintologist macrumors 6502

    May 3, 2004
    Let me ask you something, how much do you pay for your unlimited data plan taxes included per month?
  19. ToroidalZeus macrumors 68020


    Dec 8, 2009
    They are not the same. The $400 subsidy offsets the value of deprecation on the iPhone. So you pay 200 (+ tax upfront) and can then sell it for 200 after 2 years to break even.

    Since most people don't switch carriers day to day, being locked in a contract makes no practical different.
  20. SlipperySlop Suspended

    Sep 14, 2015
    Huh? I'm on the unlimited plan and I'm NOT "way overpaying". How do you people come up with this stuff?
  21. Popeye206 macrumors 68040


    Sep 6, 2007
    Call it what you want, but it works out the same as before. This is just making the phone separate from the phone plan and probably reducing the subsidies for the Carriers.

    If I understand this right, it actually may hurt the lower end phones as they won't be able to bury the true cost of the "free" phones.
  22. Boatboy24 macrumors 6502a

    Nov 4, 2011
    1 Infinite Loop
    So this, on top of the unlimited data plan price increase. :cool: I'll have a 'get out of jail free' card for my ETF after the price increase. Looks like I may be taking advantage of it
  23. macintologist macrumors 6502

    May 3, 2004
    You can check your data usage by logging into your AT&T account online or using their app.
  24. ToroidalZeus macrumors 68020


    Dec 8, 2009
    I pay 260 a month for 5 lines. I get 2.5 free iPhones a year. (2 one year, 3 next year) So a value of value of 135 a month. Net cost is then $125.
  25. dampfnudel macrumors 68030

    Aug 14, 2010
    Brooklyn, NY
    I think there's a 99 percent chance of that happening. Verizon is next at bat.

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