AT&T will join other carriers in discontinuing the traditional two-year contract at the start of the new year, according to a report from Engagdet.
Starting January 8, AT&T said it will end its contract offering as part of a “pricing simplification effort.”
The two-year contract option will be replaced by AT&T’s Next device lease program and full retail price payment options for both new and existing customers, according to an internal memo obtained by Engagdet. Installment plans will also be introduced for Quick Messaging devices and Basic devices, the carrier said.
AT&T’s final move to drop the subsidy model comes after the carrier decided to halt the active promotion and sale of two-year contracts in June of this year.
With the change, AT&T will join several other major carriers who no longer offer device subsidies.
In March 2013, T-Mobile announced the end of subsidies in favor of its no-contract Simple Choice price plans and installment payments.
Verizon followed suit this August when it, too, killed the device subsidy and announced a new price structure. Like AT&T, Verizon offers installment payment and retail price options for those seeking to purchase a new device.
Though Sprint was reportedly considering the elimination of device subsidies in late 2014, the carrier has yet to make the break, making it the only remaining Tier-1 carrier to offer contract subsidies.