AT&T, one of the US' largest carriers, has opted to make a significant change to its arrangements with third-party resellers of its services, including franchises and agents such as Apple, Walmart, and others. All non-company stores will be restricted from offering any two-year contracts in the traditional format with an up-front down payment, though AT&T company stores and its own online site will continue to offer contracts. Instead, retailers will have to offer the
AT&T Next option, where buyers pay the cost of the phone alongside the monthly service plan fees.
The change, which was first discovered through a leaked Walmart memo, has since been confirmed with other retailers. The AT&T Next program has the advantage of requiring no up-front cost for customers to obtain a new phone or tablet, and also allows for more frequent upgrading. However, buyers continuously pay a monthly surcharge to cover the full unsubsidized cost of the device, along with the monthly charge for the voice and data plan, which can end up costing more overall.
Current options for contracts ending soon
One advantage of the program is that buyers can opt to "pay off" the cost of device more quickly or slowly as desired, but with sellers such as Apple there is also the option of paying off the entire cost of the phone upfront, which often results in dramatically cheaper plans and total cost of ownership across a two-year period. Consumers have generally responded positively to the various carriers' versions of installment payment plans, enjoying the option of being free to change carriers as desired (once the cost of the device is paid off) without being locked into fixed-term contracts, as well as the option to upgrade as often as desired.
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