AT&T reportedly set to ditch 2-year smartphone contracts on Jan. 8 [Update]

Update: AT&T has sent over a statement that both confirms, as well as clarifies, the carrier's plans:

"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. Starting January 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."

Original story: AT&T looks like it is finally close to getting rid of the old-fashioned two-year contract plan for buying smartphones. A new report, citing a leaked internal document from the wireless carrier, says that AT&T will no longer offer such contracts starting on January 8 for smartphones.

The report from Engadget says that on that date, new and existing AT&T customers will have to pay the full price for a new phone upfront or pay for it using its AT&T Next installment plans. In addition, basic phones and "Quick Messaging Devices" from the carrier will also be under these new purchase options. It's not clear yet if products like tablets and smartwatches will also ditch two-year contracts.

T-Mobile has already done away with two-year contracts for its smartphones, but Sprint still offers them for its products. Verizon customers with current contracts can also choose to continue with that kind of payment plan.

Source: Engadget

204 Comments
  • I hate them.
  • I despise AT&T Next. If they subject us to that garbage I'm getting rid of AT&T.
  • How about you buy outright or quit complaining. #switch
  • Or he/she can opt to not be a customer of a company that changes how they do business.
  • I'm not understanding why this is an issue?  Pay for a phone, or pay an unrealistically high amount per month for phone service?  I would rather pay for the phone, and get the cheaper service.  When signing a two year contract, you are literally putting money into AT&T pockets for a guaranteed 2 years.  When paying via Next, or flat out, you can leave when you want, and take a phone with you.  I read this, and see a new dawn coming in Wireless, where we start catching up to the rest of the world, and not be tied to a single carrier, but a day were phones are bought and taken to other carriers.
  • Correct. You don't understand.
  • He understands just fine. I did the math a few months ago and it goes something like this: $200 for a new phone +$45 for activation fee. Phone plan is $60 a month for two years. Total cost of service and phone $200 + $45 + ($60x24) = $1685 not including taxes. On ATT next, phone is $0 down, $25 a month for 24 months and service is $45 a month for that period. ($25 x 24) + ($45 x 24) = $1680, not including tax. So the only difference is that you pay more upfront with the subsided phone while you pay more per month on Next. BUT you can also pay part of your phone upfront, which lowers your instalments. Next does not change the price, but it's much more flexible than a contact.
  • Nice math for one possible scenario. I got my 1020 for absolutely zero dollars, no tax, and got the activation fee waived when renewing my 2-year contract. I also have an old unlimited data plan. There is nothing you can say to make me happy about the death of the 2-year contract. That coupled with the fact that I have no upgrade path from the 1020 makes Metro PCS sound good, which is truly a sad state of affairs.
  • You dont get it. Maybe it's me. I have a phone, I am going to keep it for a year or more. If the carrier's coverage is good, why should I change carriers ? So a 2 year is not a big deal...I am going to have a phone anyway. When you say Cheaper service, your talking about the phone monthly costs (the extra phone cost, not the service cost) A 2 year contract you would get a discounted phone, say example, a new iPhone 6s for $199 (about and no contract is $600+)) and you are stuck in a 2 year contract. When the contract is up, you own the phone, no extra monthly fees or costs for the phone and you DONT have to turn it in at the end of the agreement. They all are pulling this crap, I guess I dont buy a new phone any more...
  • It is this reasoning that gives American carriers so much power over their customers as well as causing the exploitation of millions of hapless workers in China a d global warming.
  • You do realize that, if you completely pay off a device, you are NOT required to turn in a device with AT&T Next, right? You'll own the device at the end of your payment plan (And you're free to pay it off completely at any time), just like you own your device at the end of your contact. Not arguing that AT&T is inferior or superior, just clarifying that you don't always have to return your device to the carrier.
  • You do pay more for your service when you have a two year contract. If you're not in a contract, your service price drops about $20 per month, per phone, depending on the data plan you have. It's always cheaper to buy the phone outright and have cheaper service.
  • On att mobile share value plan it is $15 a month per line for byod or att next.
    Sign a 2 year contract and that number jumps to $40 a month.
    $25 more a month
    25x24= $600
    That's $600 more you will pay, for that price you can buy an unlocked phone. This doesn't include taxes or fees either, nor the price of the phone.
    Att next would be the same, say you get a 64gb iPhone 6s plus. That's $850 split into payments. So you end up paying the same.
    We're paying $240 a month after taxes and fees for 7 lines with 15fv shared all byod. Posted via the Windows Central App for Android on my Oneplus One
  • Thank you, bunch of complaining b¡Tches!
  • If these b* weren't complaining there would be no reason to visit the forums on Windows Central. 
  • What is there to dispise?  Get a phone on the Next20 plan and you are getting it for zero down and 0% interest with the same service discount you get if you paid cash.  Financially it is a much better deal than buying it with a 2 year contract.  In fact, I am surprised anyone would even buy it that old way anymore.  Its a bad financial decision.  So few must do it that way anymore they are just phasing it out.  Oh, and you can also trade in the phone in 12 months with no penalty to get a new one as long as the phone is in good condition.  THAT could be a bad decision if you keep your phones more than 2 years.  But since most don't, and most old phones are sitting in a drawer somewhere doing nothing, trading it in is not a terrible idea in reality    
  • I've kept every Windows Phone I've had: Samsung Focus, Lumia 900, Lumia 920, Lumia 635 (test device), Lumia 640 (test device), Lumia 1020, Lumia 950.  I'm currently using the 1020....the 950 was a horrible decision.
  • Then you would be someone who wants to keep it for 20 months and owns it
  • Why was the 950 a horrible decision? If you still have it and aren't going to use it you might as well let me use it everyday on your behalf with my sim card. Or we can do an even swap with my HTC One M8 (Windows version) which is a great phone and mine is still like new.
  • The only thing I hate about my 950 over the 1020 is my camera. That thing is BS
  • 950 is easily the best phone yet
  • What does your shopping habits have to do with AT&T ditching 2 year contracts?  Nevermind, This cat is an autobot.
  • I'll take the 950 off your hands for you! Then it won't bring down the rest of your collection :)
  • While I generally agree with your premise, there is a slight inequality, as the retail prices of devices are mildly inflated under the NEXT program. For example a surface 3 bought at Microsoft store, has more memory and sells for $499 (currently on sale for $399). AT&T sells the 32gb model for $599. So while you aren't paying interest, the profit is padded into the retail price. If you are ok with that, then its not a bad program. That is how I bought my surface 3.
  • Absolutely true.  I was not arguing it was better than buying it unlocked from Microsoft.  Talking about the different ATT plans.  It's the same retail price amoung their plans but paying cash or using NEXT gives you a discount on the service which the 2yr plan does not
  • Surface 3 LTE is more expensive than regular Surface 3
  • Yea but the 950 unlocked is cheaper th an the 950 from AT&T.  That's what I was thinking he was referring too.  But the 950 Unlocked doesn't work well with the visual mail.   For the extra $50 I'd still just buy the phone from AT&T to ensure full support and compatibility.  $50 over a couple years of useful life is really not worth worrying about.  it's LITERALLY pennies (per day)
  • you clearly have no clue what you are talkling about... the Surface 3 WITH LTE and 64GB drive is on sale at both AT&T and Microsoft  $499 right now... no difference in price... the $399 price you referenced is WITHOUT LTE HARDWARE
  • Correct, but I just left AT&T and the Surface 3 LTE is even more cheaper, it's just $200 if you get a Lumia 950 with it. ☺
  • The Surface 3 is 64gb via AT&T for consumers . I 100% agree. Contracts are sometimes the better deal. Doing any math, it is always better to have options. ALWAYS!
  • Not sure if the printed material was wrong, or they sent me the wrong item, but I bougt one of those Surface 3 LTE's from AT&T when I bought the 950.  It has 128bg not 64.  Pleasant surprise :)  
  • You ar partially correct. But People with Grandfather Unlimited data plan and Employer discount, they will pay way less than  AT&T next. And luckily if you get a deal with Zero downpayment for 2 year contract, you will save more. AT&T may have reduced Call and data plan with AT&T next, but you are paying alot for the pone without any subsidy. Your math will not work will all plans.  AT&T used to offer phone upgrade just after 20 months but not any more.  There is a reason why AT&T is ditching 2 year contract. 
  • Good point.  If you are on one of those legacy plans (which AT&T does not offer anymore) then the math is indeed different.  I ditched my a couple years ago because I needed to add services and features.  You can only stay with those legacy plans if you leave them absolutely untouched.  My life is too much in flux.   What met my needs yesterday often won't do today. 
  • Why do you "despise" AT&T Next?
  • You do realize all of the big 3 are going/have gone this way? The only way you are going to get away from it is to buy your phone outright and go to an MVNO. I left AT&T just to save some money on my bill, but if I could have afforded it, I would have stayed. Next is essentially a 0% interest payment plan. It is only a bad deal if you trade your phone in every year instead of paying it off.   EDIT: I see Spicymikey said essentially the same thing. Sorry for rehashing it.
  • I hate they have the best handsets also, but I will go pick up a Lumia 950 today I guess on that contract then in the when the contract is up I will consider other options as far as carriers go..
  • Do the math. It will likely cost you less via NEXT than with a contract. Look at how much the plan will cost you with NEXT discounts vs contract pricing. It is different.
  • Their prices are too high. Much better to get the unlocked 950 and use on t-mobile or wherever.
  • I hate contracts, makes so much more sense to buy full price. But all these idiots use financing plans and that just benefits the carrier. I'll buy my phone unlocked from somewhere else and put my sim in it, I don't want carriers telling me what phones I can and can't have. Which is why I hate CDMA Verizon and Sprint because besides the phones they sale you really have no other option to byod. While with att, tmobile, and their MVNOs, you can bring any unlocked gsm phone and it will work as long as it has the right frequencies. Posted via the Windows Central App for Android on my Oneplus One
  • Good get rid of 2 year contracts
  • Disagree.
  • Next is only good for the people who buy a new iPhone every 6 months..
  • And that's not everyone
  • They have Next plans that are 24+ months and it's virtually the same cost as lumping the phone payment and data plan into a single payment (i.e. 2 year contract).  The contract pricing often ends up costing more in the long run than the Next plans.  It makes sense for them to consolidate plans that have basically the same costs.  It's confusing to customers.  I for one am very happy to see the US carrier locked phone contract model dying a slow (too slow) death. At the end of the day, AT&T is going to overcharge you for any phone get through them no matter how your pay for it.
  • This is really bad news for me. I was hoping this wouldn't happen until 2017 so I could get a "Surface" phone on contract. Plus, I still have unlimited data that's been grandfathered in, so my options will be to upgrade on a two year now to get a 950 or outright by a Surface phone when it comes out. I think I should just do a final two year upgrade to the 950 and when/if a Surface phone does come out, I could probably sell my 950 for a decent amount and use that cash towards the purchase of a Surface phone thereby still keeping my grandfathered data plan. 
  • I had the old unlimited data plan years ago. I gave it up, when I added my wife and kids to my plan. I managed to catch a deal that ATT had. They offered 30 gigs of data for the price of 15 gigs and it included being able to use my phone as a hotspot. My point, look for the deals that ATT has on the sly. They don't always advertise them publicly or often. I find this plan ideal, because it was much cheaper to do the family plan and I can use my phone as a hotspot if I need to. With the current data roll-over, being what it is, I always have plenty of data each month. When I considered how much data I used with the unlimited plan, I never used more than 5 to 6 gigs a month anyway. Not to mention, with all the free public WiFi or cable service provider access to WiFi, no one on my family plan uses more than 2 gigs a month, anyway.
  • Yeah, I'll have to keep an eye out for deals. I might jump on something if it doesn't cost me much more than what I'm paying now, and I can get something reasonable when it comes to data, but the catch is unless I'm bringing my own phone to the table, I'd also have to factor in cost of a monthly financing plan for the phone. 
  • That is completely false, and could not be more wrong.
  • Not true.   It's just an installment payment plan.  Buy a $500 phone on NEXT 20 with zero down and pay $500 / 20 = $25/mth.   At the end of 20 months you own the phone.  No requirement to replace it.   Do you guys even understand how this plan works?
  • Clearly they don't. 
  • That's too bad because anyone who bought a 950 on a 2 year contract with $149 up front overpaid.  AT&T is doing these last few people a favor by eliminating that option
  • Untrue...or at least, not universally true.
  • Someone else point that out to me as well.  If you are on a legacy unlimited plan, or have other service discounts.  The math will be different and it might be better with the 2yr contract.  I didn't think of that.  But generally speaking, for most customers, the NEXT is a better plan if you have have no reason to think you will want to get rid of service in the next 20 months.  By the way, those longer plans that push it out 30 months are indeed a bad idea.  There are financing charges in there and 2 1/2 years is starting to be an awful long time to predict your needs.
  • Or do like I'm doing..... My Lumia 640 XL is on the Next 24. I just received my end of the year bonus and will pay it off. This does two things: I now own my phone free and clear and 2. It helps my credit score since it is a financing option.
  • Wait...are you saying that AT&T reports these to the credit bureaus like a proper creditor?  
  • Of course they would. And they wil report you if you don't pay them back also.  You are basicall getting a $600 phone fo less than that and walking out with it.  That's "credit" my frend.  You are taking out a credit line.   Someone with bad credit will not have the offer available to them.  It would be cash only
  • I have over 50 lines of service through AT&T.  I just logged in and compared upgrade options. With my current Mobile Share Group plan I pay $35 a month for unlimited talk, text and a pool of 120GB of shared data, plus $149 up front for a Lumia 950.  So total cost over 2 years is $989. If I upgrade that same line via Next24, which is stupidly actually 30 months of payments, at $34.97 per month, so over the 30 installments that is a total of $1049.10, but that is 6 months longer than the other plan. If I break it down monthly assumimg 30 months, my current plan costs me $1199 over the 30 months, so basically $150 more over 30 months, or $5 a month difference. If I do Next 18, which is actually 24 payments (misleading advertizing, anyone?), that means I pay $39.96 a month for 24 months, or $959.  That is $30 cheaper than my current 2-year contract plan, or a difference of $1.25 a month. Not much difference.  You could say that the $149'ers overpaid, but it's negligible.  
  • The number in the Next plan names is the month number during which you can upgrade at no cost. Essentially, AT&T will accept the used device back in lieu of the final months of payments. A Next 12 plan has 20 payments, but allows you to turn in the phone at month 12; AT&T takes ownership of the used phone and closes your installment purchase plan. (Of course, this assumes that you've kept the phone in pretty good condition.) The Next 18 and Next 24 plans only let you do the trade-in six months before the end of the installment payments while the Next 12 plan lets you escape eight months early. This is presumably because a 1 year old phone has a higher residual value than a 1.5 or 2 year old phone.
  • I get the naming convention, I just think it's misleading and shady. When I buy a house, they don't call it the "7 Year Mortgage", when it's actually a 30 year mortage just becuase the average family moves every 7 years.
  • I honestly don't see it as misleading.  It's vague.  But you are assuming something that is not suggested by the name.  If it was called OwnIt24 then you'd have a point.  It's NEXT, as in "get your next phone".  No where in the literature about the program does it seem to suggest what you are assuming. 
  • Verbally it's accurate.  What I find misleading is that in order to get the upgrade on Next 18, you must turn in your prior phone, and it must be in good physical and functional condition to be accpeted.  In essence, while they say you own the phone, it functions more like a lease.  If you choose to carry on another 6 months then you can upgrade without having to reliquish the phone you've already paid hundreds for over the last 24 months. So yes, I find it misleading.  You may not agree with me on that point, but I can promise you there will be a lot of people that either don't pick up on that detail when they sign up, or they do, but will likely forget about it in the ensuing year and a half to two years.  Even if they remain fully aware, it remains to be seen by what criteria and benchmarks trade-in devices will be accepted.
  • I understand what you are saying.  Absolutely, the term is intentionally vague.  I'll give you that.  To be clearer they should make the name Next 12/20, Next 18/24, and Next 24/30 so you are forced to stop and question what the two numbers mean.  But hey, that's called marketing.  But it's truly incorrect to suggest it's misleading.  "NEXT" does not imply you own the phone.  You are simply inferring it.  That's very different. 
  • This is interesting Mac.  Your numbers are not what I have on my bill I just bought a 950 on the NEXT 12/20.  I pay $29.95/mth for 20 months.  That's $599.  That's it.  I also get the $20 discount on the "Access Charge" for the phone.  I pay $15 for my 30gig plan.  You have 120gig so you also should pay $15. "Cost of Ownership" over 20 months will be ($29.95 x 20) + ($15 x 20) = $899.  Of course the cost of data and other charges are the same and not factored in. Where did you get the quote of $34.97 for NEXT 24/30.  The monthly fee is $19.99 for th e 950.  Are you getting these directly from AT&T or some  VAR?
  • I just logged back in to Premiere 10 minutes ago and ran the same scenario again, and...
    Got a different number.  This time Next 18 came in at $24.96 a month. This shouldn't surprise me, as I've had ongoing issues with my Premier Portal for whatever reason.  Changes I make to our account or lines of service might get reflected on the next physical bill, but never show up on Premier.  I've also added new lines of service that never showed up on Premier for weeks.  It's bee so wonky I've taken to just calling the KCC and dealing wit thme on most issues.  I have a call in to my AT&T rep to see if I can get things sorted out.  Given our luck with AT&T reps (we've been through 4 in 5 years) I'm not holding my breath.
  • Yep.  That's a different topic, but i agree their Premier web portal stinks.  But do the numbers and you should see it more cost effective using NEXT or just paying cash.  The $35 a month also drops to $15 and that's what really brings the TCO lower with NEXT vs 2yr contracts
  • Look, sometimes Next is better, sometimes not. Even on new plans: With less than 10gb, contracts on att are always better for a phone that retails more than $360 (which is any good phone)
  • I think you might be wrong Rica.  I've not seen any scenarios where someone does better with the older 2yr contract plans anymore.  Someone else said what you did and I asked for the details and they were proven wrong.  If you are going by old plans and old numbers you would be working off bad data
  • How does my bill get cheaper by adding $25 month to it?
  • Because with the 2yr contract plan that $25 access charge is $40.   Total Cost Of Ownership with NEXT is cheaper when you factor in BOTH the cost of the phone and the cost of hooking it up to the network
  • Actually, next is a terrible deal for anyone who upgrades their phone frequently. Next is best for people who keep their phones for a long time and actually pay it off and own it instead of leasing it and turning it in for an upgrade. The best is to just buy it unlocked, but Next isn't as bad as everyone likes to make it out to seem.
  • nope... next is good for people that buy th phone and then keep it... the next payments cover teh cost of the ull retail price of the phone... then once it is paid off its yours... plus when you are on a next plan you take advantage of the lower cost line rental plans, since the cost of teh phone is no longer embedded in the line rental cost  
  • Agree.
  • What's their next installment plan?
  • It's a typical installment plan.  Like anything else you buy on credit.  In this case, the cost is spread across a choice of three different options: 30-month, 24-month and 20-month.  So, while you're not tied to a calling/data plan, you ARE tied to a device unless you bought it outright.
  • You are tied to a calling/data plan through the device until it is payed off. Posted via the Windows Central App for Android
  • That's true.  But its the same obligation with the 2 year contract.  Only way to get a phone without strings attached is to pay cash up front. 
  • That's not what my contract says.  The phone purchase was a separate agreement and we have nothing binding us to our current plan.  Maybe we got a special deal, but I checked our contracts.
  • Sorry.  Thats true.  Was getting confused and talking about the phone obligation.    But you are paying more for that plan to have the option of leaving.  Paying cash or using NEXT gives you a discount on the service which the 2yr plan does not.  Best option is to pay cash for zero strings attached.  Next best plan is NEXT if you have no reason to think you will not need a phone in the next 20 months (or want to bounce around carriers).   I have a business account with AT&T with 7 lines, two LTE tablets, Uverse, Office@Hand VOIP service, and a few other things.  I spend about $700/mth with them.  I'm not going anywhere :)   Getting the phone with NEXT and spreading my payments over time is a no brainer.  I honestly think it's a no brainer for most customers unless your life is very very financially/geographically unstable.
  • I couldn't agree with this more. I got my 1520 on NEXT. Paid it off. And took it to cricket. NEXT is a lifesaver for people who don't want to or aren't able to buy a phone outright but still want to have a new phone. If Cricket wasn't saving me ~$45 a month, I would have stayed with AT&T. Hell, I may go back someday if/when my financial situation improves.
  • I'm trying to make sense of this. So I pay about $85 for my ATT plan. With a 2 year upgrade plan, I pay $200 for a new phone. My bill remains $85 and I'm already planning on staying with them for 2 years anyways. This year, I bought the 950xl for $800. If I could buy it for $200 and stay with ATT for another 2 years, which I'm doing anyway, it seems like a no brainer to go with 2 years if you plan on staying with ATT
    My ex GF got tricked into the NEXT plan when she got her 1520