AT&T will stop offering 2-year contract subsidies for new smartphone purchases on Jan. 8U.S. carrier AT&T has made repeated efforts to eradicate two-year contract subsidies for new smartphone purchases, and that plan will become absolute in just a few weeks, a leak from the company has revealed.
AT&T leaked memo, via Engadget.
In an internal document obtained by Engadget, AT&T revealed that as of Jan. 8, it will only offer smartphone purchases through its AT&T Next installment plans, or no-commitment full retail pricing. The carrier has dubbed the changes a "pricing simplification effort."
The change is set to apply to all phones sold by AT&T, including iPhones, Android handsets, Windows Phone devices, and even barebones "feature" phones.
The change has been in the works for some time. As of last June, Apple's own online store ceased offering sales of AT&T iPhones with two-year service contracts.
Two-year iPhone contracts have typically required carriers to pay high subsidies, sometimes to the point of losing money on the hardware in the hope of recouping the cost through service fees. That's why carriers like AT&T have pushed consumers to upgrade programs that spread out the cost of a new device over a two-year period.
While customers who agree to a new two-year subsidized contract can obtain an iPhone 6s starting at $199, the full price of the handset is actually $649.
AT&T will also affect legacy plan customers in February, when grandfathered unlimited data plans will be increased by $5 per month. Unlimited data plans were initially used to lure in early smartphone buyers, but the popularity of data-hungry devices like the iPhone inspired carriers to transition to capped data plans and data sharing options.