This post has been updated.
The two-year phone contract is finally dead.
AT&T confirmed this week that it will do away with two-year mobile phone plans for consumers starting Jan. 8. Under its new pricing option, “AT&T Next,” consumers will pay the full retail price of their device either up front or in monthly installments.
The switch applies to both new and existing AT&T customers, according to an internal company document obtained by Engadget. (It will not, however, apply to business customers under a qualified wireless service agreement, AT&T tells Quartz.)
AT&T is the last major wireless carrier to eliminate the two-year pricing model. T-Mobile got rid of such contracts in March 2013 as part of its aggressive “uncarrier” rebranding. A little more than a year later, Verizon said it was ditching contract plans, too. Sprint followed a few weeks after that.
In the document obtained by Engadget, AT&T bills the shift as a “pricing simplification effort.” The company tells Quartz that customers already are “overwhelmingly” choosing AT&T Next plans.
Back in July, a poll by Gallup found that 54% of adult smartphone users in the US said they upgraded a device “only when it stops working or becomes totally obsolete.” That compared with 44% who reported upgrading every two years as allowed by their carrier, and just 2% who said they upgraded whenever a new model was released.
Contract-free plans typically have lower service fees to offset the cost of the device, making them cheaper in the long run if you hold onto your device for a while. So for most of America, the death of the two-year contract should be a welcome development.
(Updated Dec. 31 at 11:54am with comments from AT&T.)