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AT&T is saying goodbye to contracts and subsidies

AT&T is saying goodbye to contracts and subsidies
Rob Wilson / Shutterstock.com

The way you're paying for your cellphone is changing. With Apple rolling out a new iPhone every year now, and its competitors like Samsung doing the same, the days of locking yourself into two-contracts with cellphone providers seem archaic.

Over the past year or so, T-Mobile, Sprint and Verizon ditched their two-year requirements. In those old deals, the cost of your phone was essentially subsidized when you committed to sticking with that one company for two years.

Now, T-Mobile, Sprint, Verizon and other cellphone providers charge you for your smartphone and, in theory, lower your monthly bill. That certainly seems to be the case with T-Mobile, which is offering loads of free stuff these days.

Now, AT&T, which acquired DirecTV for nearly $49 billion earlier this year, is dropping its two-year contracts, according to an internal memo that's been spreading around the Internet. (See photo on the next page.)

In that letter, AT&T explains it's Simplify Device Purchase Options in two ways: First, "AT&T Next and no-commitment (full-retail price) will become the only smartphone purchase options available for new and existing Consumer, standard Individual Responsibility Users (IRU)."

Next page: Installment plan; AT&T's internal memo
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