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AT&T rolls out three year equipment payment plan for wireless customers

(Image: AT&T/Graphic: The Desk)

Wireless phone company AT&T will allow customers to purchase a new phone, tablet or other device with the option to pay it off over the course of three years.

The move comes after AT&T dropped an option for customers to pay off their new devices under a shorter time frame; within the phone industry, most standard payment plans last for 24 months.

Equipment installation plans became popular with wireless providers after the Federal Communication Commission said in 2014 the companies had to unlock a customer’s phone upon request.

Prior to the decree, phone providers like AT&T locked smartphones and other devices to their networks. Customers were given devices at a deep discount, but if they wanted to switch from one company to another, they typically had to purchase a new device if a wireless company was unwilling to lock their device.

After the FCC’s order, wireless phone companies moved away from subsidizing devices, instead forcing customers to pay the full price of their new phone or tablet. To offset the rising cost of devices, phone companies allowed customers to buy on installment over the course of 24 months and agreed to unlock the hardware from their network once the device is fully paid off.

AT&T eliminated their two-year installation option a while ago, forcing customers to take a lengthier, 30-month payment plan if they did not want to pay full price for a new phone or other device. This week, the company replaced that option with the new 36-month installation plan.

The new plan will lower the monthly cost of the device for most customers while locking them into AT&T’s wireless service for a lengthier period of time, something analysts say could help reduce churn rates.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).