AT&T is ending two year contracts in January 2016

AT&T won’t offer 2-year contracts to existing or new customers come January 8. The news comes via internal documents sent to Engadget, but we can independently confirm the change as it was relayed to us over a week ago from a source.

According to documents that have gone out to AT&T employees, AT&T Next and full-retail purchases will be the only options for upgrading to new devices going forward. And again, this is for both current and new customers. AT&T is only saying that this is a “simplification effort.”

The change has both good sides and bad. For one, this gets you out of contracts and in more control over your service because you can pay off devices quicker if you’d like and move on from AT&T, should their service not be up to your standards. But this isn’t good for those who enjoyed grabbing new phones for a one time price of $99 or $199, instead of taking on a monthly payment plan.

AT&T first killed 2-year contracts with its 3rd party outlets back in June, so it only makes sense that their official stores follow along.

The documents do not say if wearables and tablets will switch over to similar payment plans, but our source thinks they’ll still have contract options. We’ll have to wait for AT&T to confirm that.

According to our source, 2-year contracts will still be available for tablets, wearables, Internet of Things (IoT) devices, and mobile hotspots. They will also remain available for CRU and custom IRU accounts, which are also known as corporate/business accounts.

On a related note, AT&T seems poised to make that basic/feature phone of yours even tougher to keep, as they are raising the monthly access fee on 300MB, 2GB, and 5GB data plans for basic phones from $20 per month to $25.

Official word out of AT&T on the change is as follows:

“With $0 down for well-qualified customers, the ability to upgrade early and down payment options available with even lower monthly installments, our customers are overwhelmingly choosing AT&T Next. Starting January 8, AT&T Next will be the primary way to get a new smartphone at AT&T. This does not apply to business customers under a qualified wireless service agreement.”