AT&T is Moving Away From 2-Year Contracts Starting June 1

Once June 1 rolls around, it’s going to be harder than ever to sign-up for a new 2-year contract at AT&T and buy a phone at a low subsidized price. According to multiple sources of ours, the wireless carrier will begin transitioning to a world where contracts are on the backburner and AT&T Next is the option that will be presented to you when it’s time to upgrade and your previous contract has ended. In some cases, it will be the only option you have, unless you feel like waiting a few extra days for your brand new phone to arrive. 

On June 1, AT&T will no longer offer (at least up front) 2-year contracts for service at Local Dealer and National Retail Locations. Your options to upgrade to a new phone and sign-up for service will be through AT&T Next, because the device payment plan approach is what “aligns with what customers want” at this stage in the game. AT&T also feels that AT&T Next simplifies choice and provides additional savings when combined with their Mobile Share Value plans.

What if you don’t want AT&T Next and would rather sign a 2-year agreement? Local Dealer locations will still technically be able to sign you up for a 2-year agreement via Direct Fulfillment, which is like them placing an order for you in store and then shipping the device to you a few days later. In other words, you wouldn’t see your new phone for a couple of days in some cases. You will also be able to sign-up for 2-year agreements at Company Owned Retail locations, customer service, and att.com. Other than that, AT&T Next is your option and will be the option presented to you.

On a related note, 2-year agreements will still be available for tablets, basic phones, Internet of Things devices, and in some bundle offers.

Of course, the move away from contracts isn’t new to the industry – T-Mobile did away with them a couple of years ago. AT&T, like T-Mobile, is just tweaking their money making machine, so that it makes money through device payment plans instead of by tacking on undisclosed device fees into service contracts when you buy a discounted phone through a subsidy. Still, this model, I think most would argue, is better for customers than 2-year contracts.

Again, once June 1 comes around, many of the AT&T stores you visit will no longer offer 2-year service agreements with discounted phones. Instead, sales reps will move you to an AT&T Next plan, where you won’t have upfront costs for phones, but will have both service and device payments.