AT&T Logo (Photo : Reuters/Rick Wilking)
AT&T has announced in an internal document sent to the company's employees that will end its two-year phone contracts on January 8 of next year. As a result new and current customers can only buy smartphones by paying the full retail price or through installments. That gives people about a week to get locked in for a couple more years.
The new policy will apply to all AT&T smartphones. Thus, even flip phones and non-smartphone handsets with keyboards must be purchased by paying the full price or via an installment plan, according to Engadget.
One big question is how the new policy will affect tablets and wearables since they are sold with two-year contracts. However, it is likely that the company will maintain such big corporate accounts.
Many other mobile carriers have already ditched their multi-year contracts. That includes the self-proclaimed "uncarrier" T-Mobile.
In June AT&T already stopped offering contracts for smartphones to customers via local dealers and partner retailers including Best Buy. This suggested that the company could switch to payment plans including AT&T Next.
Next allows AT&T customers to rent their smartphones by paying a monthly fee, according to CNET. After they have made a minimum number of payments, they swap their phones for a new one or pay off the phone in 18 to 24 months. AT&T reported earlier this year that over 30 percent of its users are on Next.
Verizon stopped promoting two-year contracts during late summer. However, it allowed customers to keep their existing contracts and smartphones.
The shift in wireless carriers' payment options has spotlighted the actual costs of smartphones. It has also changed how people buy mobile devices.
