AT&T Ditching New 2-Year Contracts On January 8

It’s been in the offing for some time, but AT&T has officially declared that after Jan. 8, 2016, the company will no longer be offering 2-year contracts to most customers.

For the last couple of years, AT&T has been nudging customers away from traditional 2-year contracts (and their affordable, subsidized phone prices) and toward AT&T Next plans, where the customer pays full price for their device but pays less each month for data.

In May of this year, it made it a lot more difficult for retail customers to get a 2-year deal by taking away that option from service resellers like Walmart and Best Buy. Then in June, AT&T stopped selling 2-year contracts to iPhone buyers through Apple’s online store.

A rep for AT&T confirmed the news — first reported by Engadget — to Consumerist.

“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,” reads an AT&T statement. “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.”

What does all this mean? If you’re currently on a contract with AT&T (it applies to all phones; not just smartphones), when it ends you’ll have to pick from the following:

• Keep your device and pay the “no-commitment” rate. At some point, you’ll probably want to get a new phone, which means you have to go out of pocket and pay for it in full, or…

• Switch to an AT&T Next plan and purchase a new phone at full price, paying in monthly installments. This has largely the same effect as a contract, in that you can’t leave without having to pay off the balance on the device.

• Switch to a new provider. Of course, both T-Mobile and Verizon have already done away with contracts and phone subsidies. So you’re not going to get a subsidized phone/contract from either of them.