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AT&T May End Multi-Year Contracts From January 8th

December 30, 2015 - Written By Kishalaya Kundu

What T-Mobile started with its trademark ‘Un-carrier’ move over two years ago, other carriers have followed one after another. Service contracts have traditionally been the single-most preferred mode of mobile phone ownership in the US ever since the introduction of mobile telephony in the country. T-Mobile sought to change that in the spring of 2013 by introducing a campaign that would eventually go on to transform the way customers buy into wireless plans in the country. The company, as part of its so-called ‘Simple Choice’ plan, introduced a new streamlined plan structure for new customers, thereby ending contracts, mobile phone subsidies, data overage charges and early termination fees. Verizon had already followed T-Mobile’s lead and done away with their two-year service contracts for new customers by introducing a new plan structure earlier this year.

While Sprint is also expected to do away with contracts sooner rather than later, the latest report from Engadget claims that the nation’s second largest wireless carrier, AT&T Mobility, is now fixing to do away with annual contracts and mobile subsidies for good. The website claims to have access to an internal memo being distributed to some company employees, which seemingly claims that the carrier is doing away with the contract system for not just new customers, but also existing subscribers. In the document, the company is apparently telling its employees that the changes are necessary to keep up-to-date with “customer preferences” and “industry trends”, which of course, is a clear and present nod to the shift away from multi-year contracts by rival carriers. The revamped plans will apparently come into effect from the eighth of next month, beyond which, AT&T subscribers looking to upgrade to a newer device will actually not have to lock themselves down with a long-term contract with the carrier anymore.

If and when the changes are finally implemented, AT&T customers will only be able to get a new phone by either paying the full retail price of their device upfront or through a lease rental system (AT&T Next) that will allow them to pay off the device in equated monthly installments, typically over a period of two years, but without any obligations, and hence, no early termination fees. While the impending changes will apparently be applicable to all phones (including feature phones) bought in individual capacity (IRU account), contracts will still be available for corporate (CRU) accounts, as per the leaked memo. Contracts will also be available for tablets, wearables and IoT (Internet of Things) devices, according to a post on Droid-Life.

AT&T had already stopped offering contracts for connections activated or smartphones bought through third-party retailers like Best Buy from June this year. While people buying feature phones were still given the option of getting into a multi-year contract, they had to visit an AT&T store to actually be able to do that. Now, if the leaked document is anything to go by, even existing AT&T customers, unlike Verizon subscribers, won’t be able to get contract extensions once their current contracts run out.

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