Sprint to abandon two year-contracts by end of 2015; announces iPhone Forever leasing plan for iPhones priced from $22/month
Sprint to Abandon Two-Year Contracts — Two-year contracts are disappearing from the U.S. wireless industry.Sprint Corp. said Monday it is doing away …
Context & Ripple Effects
The subsidized two-year contract was already eroding before Sprint moved: in June, the Apple Store dropped AT&T contract sales entirely in favor of the carrier's Next installment program. Sprint's announcement — killing contracts outright by end of 2015 and replacing them with an iPhone Forever lease from $22/month — pushes that erosion into policy.
The follow-on coverage confirms the dominoes fell as predicted: AT&T formally ended two-year contracts with its January 8 cutoff in favor of up-front purchases or Next financing, and a [[a:862954|leaked internal document showed Sprint completing its own exit alongside other major carriers]].
First-order effects
- Sprint subscribers can no longer get a discounted phone in exchange for a two-year lock-in; every new iPhone now flows through the $22/month iPhone Forever lease or an equivalent installment path.
Second-order effects
- AT&T's decision to end contracts on January 8 removes the last big-carrier alternative for subsidy seekers, leaving T-Mobile-style financing as the de facto standard across the market.
Third-order effects
- Carriers shift from owning their subscribers' handsets via contracts to acting as device financiers and lessors — recurring hardware revenue replaces the subsidy model, and upgrade timing moves from the carrier's calendar to the customer's.
The trend: US wireless is completing its transition from subsidized two-year contracts to carrier-run leasing and installment financing, with Sprint's exit closing out the subsidy era at the major carriers.