Lately we’ve seen U.S. carriers increasingly move their focus away from two-year contracts, which have been the way that most U.S. consumers buy phones for years now, and instead highlight installment plans like AT&T Next and T-Mobile’s own installment system. Two-year contracts are still an option for most carriers, but one AT&T exec thinks that that won’t be the case forever.
Ralph de la Vega, CEO of AT&T Mobility, recently told Re/code that he thinks that contracts and the phone subsidies that come with them are going to disappear. “I think it is one of those options that is going to go away slowly,” de la Vega said, explaining that the shift away from subsidies will be a result of consumers choosing them less frequently rather than the carriers simply deciding to move away from them.
To that end, it’s been discovered that Apple’s online store has dropped AT&T contracts for the iPhone, leaving customers to choose either an AT&T Next option or to pay full retail price for a new iPhone. Best Buy has stopped offering two-year contracts for AT&T phones as well. However, AT&T’s own online store still offers two-year contracts, though the first option presented to shoppers AT&T Next.
It’s strange to see two-year contracts starting to fade away considering how long they’ve been a part of the U.S. phone-buying experience. Leaving contracts behind means that carriers no longer have to subsidize the cost of phones, which is something that I’m sure they’re excited about, and the move to monthly installments also helps consumers to better understand the true cost of these little pocket computers that we all carry around.