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. According to the document below, customers activating a new account with Sprint will no longer have the option of subsidizing their smartphone purchase with a 2-year agreement. Tablets, apparently, are still able to be purchased on such an agreement.

Sprint Ends 2-year contracts

The move to ditch 2-year contracts for smartphone purchases now comes close to the timeline Sprint announced in August, when it said it would do so by the end of 2015. By doing away with 2-year contracts, Sprint is catching up with Verizon and T-Mobile, who have also made similar moves, along with AT&T, which confirmed plans to do the same starting January 8.

Thanks, anon!

130 Comments
  • I may never upgrade my phone again and I was going to be eligible in May 2016. :-(
  • I believe you may be able to because your plan may be grandfathered. Regarding an individual plan, Sprint's current non contract offerings are less expensive even when considering the additional cost of a new phone. I switched to an unlimited everything including never throttled 4G for $70/month
  • I hope so, I like my subsidy. Posted via the Android Central App
  • You end up paying more for the phone using the subsidy model...
  • I did the math with the new plans maybe a year ago, I still pay a little less with a contract overall and I don't have to out up $800 up front. My Corp discount, getting a deal through Amazon, and selling my old phone back help too. Posted via the Android Central App
  • For $800 phones subsidized on contact the initial outlay is usually $250 plus tax, in most cases, on the full retail price. How much more than $70/month are you paying for your corporate discount plan?
  • But when you pay off your phone, the price you're paying to the carrier drops with the new non-contract options. If you had a 2-year contract and didn't upgrade right away after 24 months, your monthly price would stay the same, thus giving your carrier extra money while not giving you an upgraded phone. Plenty of people have done the latter over the years! It's crazy there hasn't been a successful class-action lawsuit against all US (and Canadian) carriers because of that.
  • Or the fact that a phone needs to cost 800 dollars when they only cost about 250, 300 dollars a phone to make. Galaxy S5 (32-GB model) costs Samsung $256.52 to manufacture but charge you 750 RETAIL, apple iPhone 6 form 2014 16gb model cost apple $200.10 dollars to make the sold it for $649 retail when it was the latest and greatest, that is a 69% mark up. why do we as consumers put up with that. Apple charges their customers 100 dollars for storage upgrades and 100 dollars more for the 6S+ for .7 inch screen size increase but same processor and ram, It actually cost apple 15-20 dollars to go from 16gb to 64gb a phone so they make 80 dollars off just one person buying bigger storage. Multiply that by a 35 million sold. Why have people not made a bigger fuss about all this. Tablets 4-5 inch bigger screen double the battery only difference is they don't make a phone call but cost 2 or 300 hundred dollars less? my Nexus 7(2013) was $280 I paid $250 for it. Umm... why? A LTE radio can not cost 200 dollars. If we as the mass consumer market actually educated our selves and took a stand against these money hungry companies we would not have to be priced gauged like this, these companies have lasted this long because we the consumers have bought their products over the years, so how about some moral dignity and reflect that in your pricing schemes. $200 iphone 6 charge $300-$349 for it, 350-400 for the GS5 back when it was new. we can do this
  • well for reference, pretty much everything you buy is priced 3x what it cost to make. Partly do to the fact that their are two other entities you're Leaving out. 1 being distribution (shipping) and the other being the seller (Best Buy, Amazon) they all need to make a profit also, then add the after sale support (replace/repair/troubleshoot, updates) and you'll start to realize why things get expensive.
  • actually 649/200 is about 324.5%
    or 3.245 times the manufacturing cost. Warranty is crap as they always are so I hate dealing with warranties regardless. Meaning it's BS.
    Then there is distribution... UM like hell we need amazon and other sellers doing that. Also advertising? Advertising is useless after a certain extent. IMO they over spend on advertising, as it acts like a logarithm and tapers off. More you advertise less bang per buck in the long run. It's about balance and optimizing it would be best. Then there is supply and demand idiots keep wanting to spend 600-800 dollars on each phone when they aren't worth that much if any. flagships should come down to 400-500 range already as they need to get off their high horse IMO.
    The phone's are not made with diamonds or gold. Also heck diamonds are overpriced rocks imo but women love them because of marketing. ahem the pet rock.
    I hope project ara comes out soon as that is the only thing really exciting in the phone industry right now. Google innovates but their design needs work.
    TODAY Apple DOES NOT INNOVATE, they are a design company that takes other people's ideas and innovation and makes it look appealing mostly. Same with Samsung and other phone companies.
  • Especially now going forward with a lot of fully capable value offerings being released this year for less than $500, $400, and even $300 and less.
  • That isn't always the case, especially if you have unlimited data.
  • Not if you have 5 phones on your account like I do. Posted via the Android Central App
  • Exactly....... I have a family plan and I save $$$ staying with the old contract model
  • Yep, if you do the math, most new plans are cheaper leasing/paying month by month. The only legacy plan that is still economically efficient is the Everything Family Data 1500 with 3+ phones. Unlimited data + $10/mo off your bill if you don't do a 2 year contract.
  • With the new plans, usually yes. But most grandfathered subsidized plans are cheaper than the newer ones, even with the discount they give you for paying full price.
  • What aren't people understanding about 2 year contracts. They are not what you think they are. The plan costs for older plans that were built around the 2 year contracts are higher than any new carriers plans. Think why they have done this. Have worked in cellular for 2 years. Subsidy in no circumstance is cheaper. Those old plans are higher for a reason. It's because the cost of your phone is already cooked in to the plan.
  • You would be correct. Sprint apparently is or already has done away with unlimited data which I'm grandfathered
  • Upgrades can still get subsidy on a reactive basis. Says it right there. This is for new accounts. When you go to a new plan, whose price is already lower, you will no longer get a subsidy and existing plans with subsidies will no longer be offered. You can continue to renew your current plan, with subsidy, for the foreseeable future. Edit: It will not be advertised in commercials and such, reps may try to push you to easyPay/Lease or whatever for higher commissions, but subsidies will be available for those wishing to simply renew their contract on their current plan.
  • People feel that if they get a subsidized phone that they are getting a deal because they are *not paying for the whole phone*. Yeah keep thinking that while they beat you over the head with monthly charges that never go down. At least with IB you get less monthly fees, and once your phone is paid off your bill will go down and be even cheaper. (This doesn't apply for people on 7 yr old plans) Posted via the Android Central App
  • 3 S6 phones in the lease option, not factoring my 18% discount or taxes=$244.00/mo. (Unlimited Everything) My current plan, everything data 1500 share base $110+$19.99(line 2)+19.99 (line 3)+$30 (premium data for all 3 phones)+free unlimited loyalty minutes=$179.98/month. New S6 on contract is $49.99, so take that times 3=$149.97 Divide that by 24 to break down monthly to compare to lease=$6.25 (rounded up) Total with subsidy compared per month=$186.23. $244-$186.23=$57.77 per month savings. Posted via the Android Central App
  • Same example Note5 = $265.00/mo Subsidized Note5 $249.99-$49.99 (Subsidized S6 price)=$200 per phone extra, $600 for 3 phones. Divide that by 24 months, $25 extra per month, so I'd pay $211.23 in comparison. $265.00-$211.23=$53.77 per month savings. Posted via the Android Central App
  • Paying full cost for a Note5 $739.00 per phone=$2117 Monthly cost for 3 phones when bought full price=$190.00 $2117/24=$88.21 (rounded up) $190.00+$88.21=$278.21 per month. $278.21-$211.23=$66.98 savings per month. Posted via the Android Central App
  • By the way, I actually pay just under $180 a month for my 3 phones after discount and taxes out the door. $249.99+sales tax=$271.86 $271.86/24=$11.33 (per phone, rounded up)x 3 phones = $33.99 $180+$33.99=$213.99 per month roughly. Although my discount on the new plans would be 18% it's just the base plan, not data or additional lines. Let's say a $90 base plan, that only knocks $16.20 off before taxes per month. (Off the new plans) Posted via the Android Central App
  • I guess you were lucky to not have to pay sales tax based on the full retail price of the discounted initial outlay. Also your patience for waiting at least six months after initial release definitely saved you money. Sprint contact family plans with 3 or more plus corporate discounts that still are applicable, depending that you upgrade immediately 'when due' and get significantly discounted upfront outlay without sales tax on the full retail price, then one can pencil out savings. If you wait just a few months after upgrade availability, the savings rapidly dissappear and then cost more. Basically you're forced to upgrade to maintain savings. Most people lose because they don't 'immediately upgrade' and are not prepared to fork over initial discounted outlay when available.
  • California is the only state that taxes the full retail price on a discounted phone. Posted via the Android Central App
  • Yep, everything you just listed is why if you are on an old plan the subsidy model is better. There is a reason they are pushing the new plans, they are making more. They aren't doing it out of the good of their hearts. Posted via the Android Central App
  • The way to save money with these new plans is to remove your carrier from the retail aspect of your phone purchase. Use them for the monthly service fee but get your phones elsewhere at better prices. Paying MSRP is for suckers. Posted via the Android Central App
  • True!
  • Correct answer! :-)
  • Its called Nexus, or Moto X
  • I pay $85/m for 15GB data w/rollover and unlimited talk / text. 3 boyd phones @$15 each /m. $135/m for 3 lines on AT&T. (with 25% company discount). 1 Nexus 5, 2 Moto X 2nd Gen Not bad, not bad. Posted via Nexus 5
  • Where did you get the 18% discount from? And on which carrier? I might missed it.
  • I get 18% through Sprint from my Employer discount with my Employer. Posted via the Android Central App
  • He''s talking about a corporate discount, I think.
  • Don't forget the $36 activation fee every time you get a new phone...LOL
  • There's no activation fee for upgrades on contract. Posted via the Android Central App
  • Yes there is there is always a activation fee Posted via the Android Central App
  • I don't know about Sprint, but AT&T used to waive the activation fee on new phones if your account had been in good standing over the life of the previous contract. It's been quite a while since I was on AT&T, though, so YMMV.
  • I've been getting activation fees for years even on contract. Posted via the Android Central App
  • Yep...no activation fees when you buy your phone outright. Buying a phone through the carrier is not a good idea. That's where you get ripped off. Buy a Nexus 6P for $450 when it's on sale and be done with it. Enjoy the savings.
  • No activation fee for corporate accounts or Credit Union accounts.
  • This assumes you only keep it two years.
  • Holy fuckdoodles...$278 per month? I pay £10.50 per month for my phone line (inclusive of 20% sales tax) on Vodafone UK.
  • What are you are not calculating is the subsidy that's already cooked into your plan. You're paying $30 dollars a line on that data share 1500. The new unlimited plan is cheaper.
  • I'm going to use my current Sprint contracted plan as my example.
    $40 SERO 500P (perma waived $10 Premium data add-on, so $40 a month + tax) Plan is unlimited data, text, and Mobile to Mobile. 500 minutes for landline calls with Night & weekends 6pm-6am
    -monthly average of 11gigs of data use New Note 7 is $350 on 2yr upgrade. (Full Retail is $850)
    (It is cheaper to buy a new Note 7 at $350 with $500 savings and $40 a month plan than any other current Sprint offering) In fact it is cheaper to even pay the early termination fee of $350 and still be cheaper than Sprint easy Pay or buying Note 7 outright. I find it hard to believe that I would be better suited on a newer non-subsidized plan. Maybe I am missing something in the math.
  • Thanks, we have two accounts on the older unlimited everything plans. The average cost per phone,$67.00 mo. taxes and fees included. And I think we have unlimited roaming for data and calls/texting. Not sure about newer plans, but I think that as long as roaming does not exceed regular data,then it's covered. Now, I just upgraded to the HTC M9 for $1.00 because Best Buy had it on sale for $200.00 and my last phone was free. Last year, got iPhone 5C for $50.00 on a new line added. Free overnight shipping to out of state address. I could go on,but you get the idea. So for now,I hope we can stay put on this plan.
  • So are they dropping the price of existing customers plan by about $20 when their contracts are fulfilled since there are no more subsidies?
  • Probably not.
  • Upgrades can still get subsidy on a reactive basis. Says it right there. This is for new accounts. When you go to a new plan, whose price is already lower, you will no longer get a subsidy and existing plans with subsidies will no longer be offered. You can continue to renew your current plan, with subsidy, for the foreseeable future. Edit: It will not be advertised in commercials and such, reps may try to push you to easyPay/Lease or whatever for higher commissions, but subsidies will be available for those wishing to simply renew their contract on their current plan.
  • Exactly it's not like they're going to lower our bill. The reason they're stopping subsidies is because it costs THEM money. Posted via the Android Central App
  • Not gonna lie I do miss my old Sprint contract. 2 lines with unlimited data for $130. And I got a "free" phone every 2 years. That was a good deal. Posted via the Android Central App
  • What was the retail cost of and what were the phones you got for 'free' (no discounted price plus no sales tax on full retail value) every two years? I do agree, the legacy Sprint 1500 minute unlimited data plan especially with corporate discount on 2 or more lines remains the best if one doesn't lag on upgrading especially if the group or an individual in the group uses more than 2GB of monthly data.
  • I paid taxes once they passed the law to pay taxes on "free" phones but that's it. I got the S2 and Evo3d in 2011. Then 2 years later I upgraded to G2 and S4. Then I left because they weren't good in my area and I'm not patient. Posted via the S6 Active
  • It wasn't free. It was part of the contract.
  • Still cheaper no matter how you slice it. Once I left sprint I paid T-Mobile $100 for 2 lines unlimited no phones and now I'm paying AT&T $108 for 15gb. If I get phones at retail price($600) I'm looking at $150/month on T-Mobile and $158/month on AT&T. Also notice I said "free" Posted via the S6 Active
  • I have this plan today. Plus my employer pays the cell bill. A year and a half ago, when I upgraded, I got Nexus5 for $20 for each line and had Sprint chip in service credits to make up for that as well as the activation fee. The time before that, it was Samsung S3 and Evo 4G LTEs for $0. And it is every 20 months, not 24. Sprint would open up the upgrade discounts after 20 months with 4 months left on the contract to entice customers and prevent churning.
  • Can't touch my subsidy plan with five phones and work discount. Comes to like $52 per phone unlimited everything. Add phones for $199 or less and its no contest.
  • Like your thinking. I have 2 unlimited phone lines with 5gb lte hotspot, 3 basic ones with 1 gb LTE, 1 tablet line with 5gb lte, with work discount comes to about $200ish/month. But it's with Tmobile. So yes, whenever I want to buy a new phone, can't go wrong with a $199 phone or splurge and spend a little more for nexus phone, which is all I use.
  • The old plans are better especially if you have multiple lines. 3 Samsung S6s on the new lease option is $277 and month add taxes and it is over $300. ---
    My current unlimited family plan with 3 lines and corp discount puts me at $215 with taxes.
    $250X3 initial cost ($750) 24 months @ $215 = ($5160) TOTAL = $5910......
    New lease program with 3 Samsung S6s $300X24 = $7200 TOTAL (ooppss add the $180 activation fee)
    I don't know what new math you folks are using BUT ------------ I'm not changing anything.
  • I didn't notice anyone disagreeing about the value of contract 'family' plans with subsidies.
  • I would never lease a phone. Posted via Nexus 5
  • I hope they find a way to make the family plans cheaper with this because as it is now this only makes sense if you only have 1 phone on an account.
  • There are cheaper family plans look at the family share pack plans 120 base then 15 per line 40gb high speed no overages and 100 dollars for 10gb no overages and 15 per line. The the base is still discount able if u have one through your company credit union or triple a People dont realize that and the old plans are more expensive with up 2yr upgrade options. Plus now every country counting the us doesnt 2yr contracts we were one of the lasts ones to do two yr contracts Posted via the Android Central App
  • That $15 a month is your subsidy going bye bye
  • Family plan, 1500min non-mobile m-f 7-7, unlimited everything else.
    4 phones $200 each (800/24=33)+
    $200/month= $233 month phone&plan.
    I 'shop' it out every so often,
    Haven't found anything better yet?
    Gonna be hard to beat. Posted via the Android Central App
  • Doesn't T-Mobile have received lines with unlimited for $120 or something like that? Then shop around for a deal on a Nexus or the like and pay for them up front. Posted via the Android Central App
  • If you like the Throttle On network. Posted via the Android Central App
  • Which carrier do you have?
  • As long as you stay in a perpetual contract....
  • It's still a 2 year contract. 24 months of phone payments equals........ Posted via the Android Central App
  • Forever,......
  • I pay $40 a month for unlimited everything on Sprint. This plan is so old that only 3G existed then and SMS messages were charged in a plan. I was happy to find this plan that has unlimited talk, text messages, roaming and unlimited internet for $40. I was getting a phone every two years for about 200 dollars each time. My plan will hopefully not change. I guess that price on the phone will.
  • Never give up that plan especially now that Sprint has the best network speeds in most populated areas.
  • I wouldn't go raving about Nielson testing network speeds. RootMetrics is far more accurate. Sprint still sits at last place. Posted via the Android Central App
  • No they don't.
  • Yes they do.
  • Not in Cleveland they don't, and that's a pretty big market.
  • Was it when everything was $5? Unlimited text - $5, unlimited data - $5. I loved Sprint back in the day.. Fastest 3G (Evdo Rev. A) of everyone too. I had a local calling area plan. Unlimited minutes too. I can only make calls from the tri-state area, which was fine. I was in high school, I didn't travel much. Outside the area I had 1500 minutes Posted via Nexus 5
  • Gotta love that ZERO plan....
  • I had the same thing via their SERO plan. Ended up dropping it after 9 years (!), because the service in NYC was complete garbage. Much happier with my $30 Walmart T-Mobile plan. I rarely go over 3GB a month (thanks wifi!), and i actually get a functional connection now!
  • Plus whatever was buried in the contract.
  • This is fantastic! Once people get a taste of their bill being cheaper they won't be so quick to upgrade. It's completely ridiculous in this day and age to upgrade every 1 or 2 years. If you need to, you bought the wrong phone. Samsung better bring back replaceable batteries. All manufacturers for that matter.. That's the only point of failure if you're careful with your phones or just not clumsy... Posted via Nexus 5
  • And you just hit the nail on the head as to why they sealed up the battery. If they hadn't why would you buy another phone so soon? Posted via the Android Central App
  • Yeah well still waiting for Sprint to get Galaxy Gear S2 3G model, so annoying I can't get one still Posted via the Android Central App
  • One thing people seem to forget is that when you by a subsidized phone if the carrier changes the terms of the wireless contract you are free to cancel without penalty and keep the phone. With the new unsubsidized model you are still locked into a 2 yr phone payment without the ability to cancel because they raised your monthly phone plan payment. They basically removed their contractual obligations to you while making sure you still are contractually obligated to them if you do a monthly payment plan. Posted via the Android Central App
  • That's another reason it's best to buy your phone elsewhwere. I remember the days when you had to buy your landline phones from at&t. They were so expensive! Now you just walk into Walmart and buy a phone dirt cheap. The same thing will happen to cell phones once customers start to realize there is better options than paying your cellular carriers full price. Posted via the Android Central App
  • [quote]By doing away with 2-year contracts, Sprint is catching up with Verizon[/quote] NOT true at all. Verizon can still do 2 year upgrades for existing customers and 3rd parties like Best buy can and will activate 2 year for new verizon customers. Nothing has changed for verizon.
  • With Sprint currently held plans in good standing also will remain in effect. I'm not sure about your Best Buy new customer statement since the contract is with the carrier.
  • 'Subsidised' (contained in document, so I don't blame AC for using it) was never the right word to use. It was never a subsidy. 'Subsidised' implies the carrier is paying for part of the phone, so that you get it cheaper. Which is what many people thought. But that was clearly never the case. Now that people will actually see the full price of their phone as a separate item on their bill, they'll start thinking more about the price of them. Posted via the Android Central App
  • And hopefully, OEMs will start offering (and advertising) finance plans to buy devices directly. The more nails in the coffin of the carriers-as-retailers model, the happier I'll be.
  • Or people will learn how to save and be patient.
  • I see the exact opposite happening. Right now, the difference between a discounted S6 and a discounted note 5 is $100. That's a considerable increase. On installment billing, it's a couple dollars more per month, much easier to swallow. Posted via the Android Central App
  • Welcome Sprint. They are always in last place aren't they? Haha
  • I don't know why people think that you pay more with contract ?? If u bring ur own phone to any service do they give you discount in monthly payment for service ?? No they don't ?? And are you moving out of united state in 2 years ?? No. are you keep changing your services every year ?? Not most people do. Without contract and no discount on phones network makes more money. Yet consumer are thinking that no contract is better . if u walk into any store with your own phone with contract or without contract there is no change on your monthly service fees. Not with Verizon or with att, or sprint. Not even T-Mobile . they all charge you on prices they have set. But with contract you get discount on phones and your monthly plan stays same . doesn't go up or down. Posted via the Android Central App
  • Umm...no. With AT&T, if you bring your own phone off contract you pay $15 or $25 less per month depending on your data plan. So that's either $360 or $600 over two years.
  • Actually plans on contracts cost more than plans without contracts because the phone is subsidized into the contract plan. Plans without contracts will effectively pay the same when you add monthly payments but the difference is after 2 years. The person on contract continues to pay the same (higher price) and if they don't renew w/new phone they are effectively getting ripped off whereas the person on a non contract plan has their monthly payment go down because the phone payments are done. Without contracts and subsidies the latter will likely just stay with the lower payment and continue using the same phone because it's good enough...
  • And on contract you can't just simply leave for another carrier unless you essentially pay the phone off via the termination fee.