Sprint set to join other major US carriers in killing two-year contracts for smartphones, according to leaked internal document
Sprint kills 2-year contracts for smartphones — Sprint has gone through with its plans to 2-year contracts for smartphones, according to an internal document sent to us by an anonymous tipster.
Context & Ripple Effects
Sprint is making good on a plan it announced months ago: after pledging in August 2015 to abandon two-year contracts by year-end and launching the iPhone Forever leasing plan from $22/month as the replacement, a leaked internal document now confirms smartphones will no longer be sold on contract at all.
The timing puts Sprint directly behind AT&T, which stopped offering two-year contracts on January 8 in favor of up-front purchases or AT&T Next financing — meaning three of the four major carriers have now moved off the model within weeks of each other.
First-order effects
- New Sprint smartphone buyers immediately lose access to subsidized devices and must pick between paying full price up front or entering an installment/leasing arrangement like iPhone Forever.
Second-order effects
- Verizon, which has so far let customers keep and renew two-year contracts with subsidies, becomes the last major holdout and faces mounting competitive pressure to match rivals' pricing structures before its subsidy costs look anomalous.
Third-order effects
- If Verizon follows, the US carrier market completes its shift from hidden device subsidies baked into service plans to transparent financing and leasing — changing how handset prices are marketed and compared across carriers.
The trend: The major US carriers are dismantling the two-year contract-and-subsidy model in favor of installment financing and leasing, with each carrier's exit pressuring the remaining holdouts to follow.