AT&T will stop offering 2-year contract subsidies for new smartphone purchases on Jan. 8

U.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.

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.

23 Comments

SpamSandwich 32917 comments · 19 Years

About 8 years ago

U.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.
The bolded word should be "obsolete".

jbishop1039 258 comments · 9 Years

SpamSandwich said:

U.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.
The bolded word should be "obsolete".

No, it makes sense as is.

LoneStar88 325 comments · 9 Years

My wife and I are both on our second "Next 12" plans with her iPhone 6S and my iPhone 6S+. We started last year when we bought our iPhone 6 and 6+ on Next 12. This year, AT&T simply sent us prepaid shipping labels and we returned the 6 and 6+ after 12 months of payments.

The only thing better than this would seemingly be Apple's own deferred payment plan which includes Apple Care+. So we'll probably fully pay off our current phones come September or whenever the iPhone 7 comes out next year.

This is the best possible arrangement: leasing great Apple phones and having access to the latest features of both hardware and software.

My iPhone 6S+ is the best phone I've ever had!

Blaster 97 comments · 9 Years

LoneStar88 said:

My wife and I are both on our second "Next 12" plans with her iPhone 6S and my iPhone 6S+. We started last year when we bought our iPhone 6 and 6+ on Next 12. This year, AT&T simply sent us prepaid shipping labels and we returned the 6 and 6+ after 12 months of payments.

The only thing better than this would seemingly be Apple's own deferred payment plan which includes Apple Care+. So we'll probably fully pay off our current phones come September or whenever the iPhone 7 comes out next year.

This is the best possible arrangement: leasing great Apple phones and having access to the latest features of both hardware and software.

My iPhone 6S+ is the best phone I've ever had!

Does AT&T or Apple run a credit check each time you upgrade?

icoco3 1474 comments · 13 Years

Blaster said:

LoneStar88 said:

My wife and I are both on our second "Next 12" plans with her iPhone 6S and my iPhone 6S+. We started last year when we bought our iPhone 6 and 6+ on Next 12. This year, AT&T simply sent us prepaid shipping labels and we returned the 6 and 6+ after 12 months of payments.

The only thing better than this would seemingly be Apple's own deferred payment plan which includes Apple Care+. So we'll probably fully pay off our current phones come September or whenever the iPhone 7 comes out next year.

This is the best possible arrangement: leasing great Apple phones and having access to the latest features of both hardware and software.

My iPhone 6S+ is the best phone I've ever had!

Does AT&T or Apple run a credit check each time you upgrade?

I was only credit checked when I first got on a regular plan years ago. Now, as long as your bill is paid up to date, it is in and out for us at the ATT store. Apple may be different.