(JeepersMedia)
From a consumer’s point of view, there isn’t much of a difference. You could buy an unlocked phone out of pocket and not be tied to any one carrier, but when carriers offer interest-free installment plans, that doesn’t make much sense.
In practical terms, there’s not much of a difference between not being able to leave your carrier until you pay off 24 monthly installments on your new Galaxy and signing a two-year contract. Losing your phone is still an expensive calamity. You’re still tied to your carrier until you hand over a large amount of money all at once: under this model, it’s just called paying off your device instead of an early termination fee.
That’s the important difference: it used to be that when carriers made materially adverse changes to your mobile contract after you agreed to it, that would give you the opportunity to leave the carrier without penalty. This site made a point of pointing out such opportunities when they came along.
Most customers didn’t do this or know that it was an option, but now that consumers are making installment or lease payments on a device rather than signing a contract, opportunities to escape from contracts ETF-free will no longer be a thing.
Well… they won’t be a thing for most carriers. This change will mean that out of the four major carriers, AT&T will be the only one that still offers traditional phone subsidies and contracts to new customers. (Verizon will let customers with existing contracts sign new ones.)
Sprint to Abandon Two-Year Contracts [Wall Street Journal]
by Laura Northrup via Consumerist
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