Leaked corporate memo says that AT&T will drop two-year contracts and phone subsidies on January 8th

Leaked corporate memo says that AT&T will drop two-year contracts and phone subsidies on January 8th
Over two years after T-Mobile set the tone by eliminating two-year contracts and subsidized phones, AT&T will do the same starting on January 8th. That is according to a leaked corporate memo. This past summer, the nation's second largest carrier stopped offering two-year contracts for phones through its retailing partners like Best Buy.

Besides smartphones, starting on January 8th there will be no more two-year contracts issued for featurephones. What isn't clear is whether AT&T will continue to offer tablets and certain smartwatches (like the stand-alone Samsung Gear S2) with a two-year pact. The carrier says that it is eliminating subsidies to align itself with trends in the industry.

So if you want to purchase a new phone from AT&T starting on January 8th, your options are clear. You can buy the device using an installment plan, or pay full retail. Even if you have just had a two-year pact expire making you a free agent, your next equipment purchase on AT&T will have to be made using one of the aforementioned methods. According to the FAQ page from the leaked memo, even AT&T employees won't be able to purchase a subsidized phone with a two-year contract after January 8th.

AT&T has various options with AT&T Next. Those who are well qualified can put $0 down on a new device and pay off the remainder in 30 months using AT&T Next 24. After 24 months, the customer can upgrade to a new phone. With AT&T Next 18, after putting $0 down, the remaining balance is paid off in 24 monthly installments. The subscriber can upgrade to a new phone after 18 months. And with AT&T Next 12, the remaining balance due after putting $0 down, is paid off in 20 monthly installments. Subscribers can upgrade to a new phone after 12 months.

If you cannot qualify for the above mentioned installment plans, you might be able to make an equipment purchase using AT&T Next with down payment. With this plan, you pay 30% of the equipment cost upfront. The balance is paid monthly in 28 installments with an upgrade possible after 12 payments.

source: Engadget



1. bucky

Posts: 3794; Member since: Sep 30, 2009

This new scheme worries me. I feel like they are using the whole "no contract" thing so that they can hide the real charges of monthly service within financing of phones.

4. Branson28

Posts: 55; Member since: Mar 26, 2014

There's no interest rate on the phones at all, and if you multiply the payments by the months you get the exact amount that the phone costs. Smartphones are too expensive now for the 2-year contract to be logical. The thing is your bill will be just as high either way. Only now they tell you exactly what you're paying for the phone, and exactly what you're paying for the service. In 2-year contract that raised the price of the service to cover the cost of the phone. No matter what people say, AT&T was never just giving phones away for .99cents because of "customer loyalty" and because they "signed a contract". You've always had to pay for your phone, phones are just too expensive now to cover it up.

13. donfem

Posts: 708; Member since: Mar 30, 2011

I guess you have no calculator to help figure out if there are hidden charges in it?

15. Sdotreznikk

Posts: 9; Member since: Oct 28, 2014

no calculator needed, $649.99, $21.67 per month for 30 months comes to $650.10 so $0.11 in hidden charges? $32.50 x 20 months is $360 so $.01 in hidden charges?

16. Sdotreznikk

Posts: 9; Member since: Oct 28, 2014

****$350 even mistyped

19. TheOriginal

Posts: 49; Member since: Oct 28, 2015

the last installment is not for the full amount, they reduce the last one.

22. Sdotreznikk

Posts: 9; Member since: Oct 28, 2014

ah yes, you are correct, I forgot about that.

2. darkkjedii

Posts: 31529; Member since: Feb 05, 2011

At least give one year contract options. Put half down, and you're locked in for a year. I love the Next option personally.

3. mike2959

Posts: 697; Member since: Oct 08, 2011

I'm pretty sure companies don't come up with this stuff to make LESS money lol.

5. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Especially AT&T and Comcast.

6. jeroome86

Posts: 2314; Member since: Apr 12, 2012

Just did a 2 year contract couple months ago which I said never do again. I will have to come out of pocket if the gadget urge hits me to soon. Not a big deal for me. Could be for some.

10. ChocolateThunder

Posts: 12; Member since: Dec 30, 2015

Evidently it was or else you wouldn't of signed a new 2 year.

7. hwb01

Posts: 355; Member since: Apr 17, 2014

On a less than 10GB plan, the two year contract is actually cheaper. They're just trying to get you to pay for more data.

8. psyccc

Posts: 3; Member since: Sep 02, 2011

'Cheaper' is a relative term to how much you want to pay for the device vs. how much it will ultimately cost. I'm not going to post a ton of monetary examples because I'm working on my Star Wars Battlefront character, but on average the high end devices are only $70-$90 'cheaper' when factoring in loss of the $15 line discount, and considering the subsidized price vs. sales tax price, that is not a big difference.

9. AlikMalix unregistered

They tried to sway me and my wife to a NEXT plan this October, but I stuck to my 2-yr contract subsidized unlimited plan... The NEXT plan will cost me more if I wanted to keep my unlimited + NEXT which I declined. Looks like I'll have to get a tiered version with NEXT and "Lease" my phones to keep the costs down ::: or pay extra per month to keep my unlimited when my contract expires less then 2 years from now. (oh and they're adding $5 extra to unlimited plans too).... They're really making it difficult to keep unlimited data plans. If I'm pushed into a tiered NEXT plan - I'll switch to Verizon as the coverage is a little better in my area. The only nice thing about it, is I can upgrade every year for cheaper monthly payment (but I'll have to loose unlimited)... Are there really that many unlimited data plan customers that they try to "smoke" them out? I was under the impression (self diagnosed) that I'm just one of the very, very few... -----> Hey PA can we have a POLL based on who's on what plan and what carrier?

11. psyccc

Posts: 3; Member since: Sep 02, 2011

On average when I see someone on an unlimited plan in my store they are doing between 1-3GB a month. There are a ton of people still holding out on it, but the majority aren't actually using the data to justify needing it, they're just keeping it because a friend or family member told them to. It's somewhat frustrating because if you are using the data to justify it, I'll tell you 100% to keep it, because I most likely can't build you a more cost effective plan; on the flipside, when you are averaging 1-3GB, I know 99% of the time I can save you money in both short term and long term.

18. DnB925Art

Posts: 1168; Member since: May 23, 2013

So it's pretty funny then that carriers want to get rid of unlimited plans since, as you say, most people are not using that much data on it and you can get them on a tiered plan that they will be paying less. If the carriers wanted more money, they should keep people on these plans, especially for these types of people since they are making a higher amount on them. Maybe there are enough of these low data using unlimited plan subscribers to offset the costs of the ones that use a huge amount of data. I'm thinking they want to move people off unlimited data plans to prepare for the future as more and more services require an increasing amount of data, such as streaming 4K video and VoLTE for eample, these low data users will some day become high data users because these services will require an ever increasing amount of data.

20. TheOriginal

Posts: 49; Member since: Oct 28, 2015

you work there too eh? i do the same

24. psyccc

Posts: 3; Member since: Sep 02, 2011

Yessir! I manage an authorized retail location, how about you?

25. TheOriginal

Posts: 49; Member since: Oct 28, 2015

I work in a call center

26. Branson28

Posts: 55; Member since: Mar 26, 2014

Lol same

23. TheOriginal

Posts: 49; Member since: Oct 28, 2015

you do not have to lose youre unl data to go to the next... your unl data is a PLAN, the next agreement is a FEATURE added to your account, what happens to one does not affect the other. working for att i see people all the time with the next program and unl data at the same time.

12. Martineverest

Posts: 521; Member since: Oct 27, 2015

IPhones sales will be affected. No more record breaking sales

14. Vanliewn

Posts: 65; Member since: Oct 03, 2015

1 does this mean we will lose our unlimited data plans? 2 will this void current 2 year contacts, or just prevent us from having another one?

17. Sdotreznikk

Posts: 9; Member since: Oct 28, 2014

you dont lose unlimited, you can either keep unlimited and pay retail for the phone, or you switch to mobile share to make it cheaper, and it doesnt void contracts, you just cant sign another one when buying a phone.

21. TheOriginal

Posts: 49; Member since: Oct 28, 2015

your plan is not affected, this is not a new plan it is a new upgrade "program" I see people all the time on att next and they have unl data. the att next programs are available to you after only 18 months into the contract but your current contracts will stay as they are.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.