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AT&T Phases Out its Subsidies and Contracts in Apple Stores

Apple Stores and Best Buy alike eventually plan to drop AT&T iPhone subsidies in favor of installment plans, according to a Monday, June 1 story from CNET, which cited an unidentified spokeswoman. In other words, customers looking for an AT&T iPhone have to sign up for an AT&T Next plan or pay full price.

The phasing out of the subsidies and contracts is not clear yet. AT&T will continue to offer “traditional service contracts,” but only in its retail stores and through its website, CNET reported. Third-party retail stores such as Apple will cease to do so.

As an alternative, AT&T has developed the Next Program, which saw an added 4.1 million customers in the first quarter of 2015. In fact, according to its April report, more than 30 percent of its smartphones are now on Next.

T-Mobile was the first to make a similar move two years ago, when it got rid of its subsidized iPhone plan. Verizon has also made changes to its payment program whereby customers now need to pay off their smartphones entirely before upgrading them.

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