AT&T to ditch most two-year phone contracts on January 8th

Goodbye subsidy; you'll have to pay upfront or in installments for a new phone.

AT&T's long affair with the two-year contract continues to wind down, Engadget has learned. According to an internal document sent to employees this morning, new and existing customers will only be able to get new phones by paying the full price upfront or in installments over time. The move is set to take effect on January 8th, so you'd better act fast if you (for some reason) really want to lock yourself down for a few more years.

Just to be perfectly clear, this move applies to all of AT&T's phones. Once the new year rolls around, even flip phones and non-smartphones with keyboards (what AT&T likes to call "Quick Messaging Devices") must be bought outright or with an installment plan. What's less clear is the status of wearables like the Samsung Gear S2 and tablets, which are currently sold (and promoted heavily) with two-year contracts. It's also possible (if not likely) that AT&T will keep multi-year contracts around for large corporate accounts, and we're looking into both situations. AT&T's vague, highly vetted statement says the change is being made for the sake of "aligning... service offerings with customer and industry trends". Well, we can't argue with that. While smaller, scrappier carriers like T-Mobile have already bailed on the multi-year contract model, AT&T has been slower to act.

This June, the company stopped offering contracts for smartphones to customers through local dealers and partner retailers like Best Buy and Apple. The option to ink a contract remained for people who bought basic phones or went straight to an AT&T store and asked specifically for a contract extension. The message? Payment plans like AT&T Next were the future. That sentiment was echoed when Verizon stopped pushing two-year contracts a few months later. The thing is, people who had those contracts could keep them and still get subsidized phones if they wanted — an option that won't be available to AT&T customers. Still have questions? Feel free to refer to the FAQ our tipster friend also provided: