Starting Jan. 8, AT&T will no longer offer two-year phone contracts.
Engadget was the first to report that the carrier's engagement with two-year phone plans has been winding down.
Soon, the carrier will only allow consumers to purchase their smartphones via the AT&T Next installment plan or by paying the total price upfront.
For now, the two-year contracts are gradually being phased out and will be totally unavailable for regular customers on Jan. 8. Corporate accounts, on the other hand, can still continue with the traditional and subsidized upgrades of the two-year contracts.
The news was also confirmed by an AT&T spokesperson providing a statement to The Verge.
"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," said the spokesperson. "Starting Jan. 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."
This move will apply to all phones of AT&T, including its flip phones and "Quick Messaging Devices," which are non-smartphones with keyboards.
"New customers who want to purchase a QMD or Basic phone can choose an installment plan or pay no-commitment," says the FAQ a tipster provided to Engadget.
The termination of the two-year contracts is not actually new for AT&T given that it already made the move earlier this year with its third-party resellers. This signifies that until Jan. 8, the AT&T website and stores are the only places where the two-year contracts are still offered.
Ralph de la Vega, president and CEO of AT&T, also said earlier this year that two-year contracts are going away. In his own words last June in an interview with Re/code, "I think it is one of those options that is going to go away slowly."
Clearly, de la Vega's statement is already coming to fruition.
However, there's the unsolved issue regarding tablets and the Samsung Gear S2 which are heavily promoted and sold with two-year contracts. Since there's still no clear status about these products, customers can only wait for AT&T's further announcement, especially if they take interest in tablets and wearables.
For those who are wondering why such a change has to be made, AT&T has been vague in its statement. It said it is doing it for "aligning ... service offerings with customer and industry trends."
