AT&T getting rid of phone contracts and subsidies this week

(credit: AT&T)

AT&T will stop offering phone subsidies with two-year contracts this Friday, requiring customers to purchase phones at full price or on device installment plans.

AT&T has offered the option to buy devices under monthly installment plans since mid-2013. This newer model adopted by all major carriers lets customers trade in their devices for new ones every year or so or eventually pay off the full price and keep the phone. Installment plans let customers avoid signing contracts that have early termination fees, although a customer generally must pay off the full price of the phone in order to switch carriers.

Device subsidies—in which a $650 phone might cost just $200 upfront—are still offered on AT&T's website today. But that option will go away on January 8, Engadget reported last week, citing an internal document sent to AT&T employees. AT&T confirmed the change to Ars, saying that both new and existing customers will have to either pay full price for phones up-front, bring their own, or opt for "AT&T Next" installment plans. There is an exception for business customers.

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