January 4, 2016
AT&T greets the new year by taking it back
No more two-year contracts with AT&T. The story broke through tech industry site Engadget.com, which reported they obtained internal memos claiming AT&T will kick off 2016 by eliminating two-year contracts, effective January 8.
That means AT&T will officially join other competitors by forcing new customers – or current customers who want a new phone – to pay full freight upfront or pay for the phone in monthly installments.
The move, pioneered by Verizon, effectively puts a stop to a major upside to switching to another carrier. Both T-Mobile and Sprint have offered to “pay you to switch” from the higher ranked carriers to offset any dreaded early termination fees.
Those fees kept many On The Bubble consumers from trading into cheaper plans on other networks because they could run into hundreds of dollars. But when the lower tier of the Top Four began offering to pay customers to switch that stick disappeared from Verizon and AT&T’s arsenal.
The Top Tier in wireless communication then fought back with pay as you go plans. Instead of giving deep discounts on handsets for customers who signed up for two-year contracts, the companies offered to break up the cost of the phone into monthly installments, making it MUCH more expensive to switch. Even if a customer gets a free phone at the new company, they will still be stuck paying for one they can’t even use … unless they jailbreak it.
Of course, none of this will be in AT&T’s PR for this switch. If Verizon’s PR is any indication of their message, expect AT&T to position their decision as an opportunity for customers to Get Out Of Contracts or be free from long-term commitments. Pay no attention to that big price tag behind the curtain.
However, they plan to work it, understand the days of customers getting what are essentially handheld computers for next to nothing are pretty much over. If you want to play, you will have to pay.