Sprint Corp. said Monday it is doing away with two-year contracts and will shift entirely to a model where customers lease their smartphones.
Verizon Communications Inc. said this month it would no longer sell contracts, and T-Mobile US Inc. did away with contracts more than two years ago. AT&T Inc. is the only major U.S. carrier that still offers to subsidize smartphone purchases.
Two-year contracts had been the norm for years, in which customers signed the agreement in exchange for a discounted price on a phone. Now, carriers primarily offer cheaper monthly plans without contracts but require customers to pay full price for their devices.
As part of its shift, Sprint unveiled Monday a new leasing plan called iPhone Forever that starts at $22 a month for an iPhone, in addition to the monthly service fee. Paying $22 a month and getting a new phone every year means a customer will effectively pay about $264 for a year’s use of a 16 gigabyte iPhone 6, which has a $649 retail price.
