Leaked document: Sprint killing two-year contracts (again)

Sprint in January got rid of two-year contracts. Then, in February, Sprint brought two-year deals back. Now, according to a leaked document obtained and published by Android Central, the carrier is again going to get rid of the two-year deal.
The internal document sets May 24 as the sunset date for new two-year contracts, and further notes current Sprint customers can get the contracts “on a reactive basis only.” The doc doesn’t specify the reasoning for the move.
In it’s most recent iteration, the two-year contract option impacted various device purchasing options allowing customers to pay a lower flat-rate price on a device in exchange for paying higher monthly access charges. Customers, for instance, can now select to pay $200 up front for an Apple iPhone 6s, but are then required to pay an additional $25 per month in extra data access charges compared with selecting one of the carrier’s payment or lease options. Customers can avoid the additional access charge by selecting the carrier’s “unlimited” data package, which is priced at $75 per month, or avoid all access charges by choosing to pay the full price on the device up front.
In the last round, the emphasis on device leasing and monthly payments drew some criticism from Craig Moffett of MoffettNathanson, who noted Sprint sourced 71% of its earnings before interest, taxes and depreciation from “accounting distortions” during the fourth quarter of 2015. Moffett said the accounting distortions started when carriers moved to device financing instead of subsidized pricing, and Sprint’s financials became even further divorced from reality when the carrier started leasing devices.
“Things really went off the rails when Sprint started doing leasing and I wouldn’t be surprised to see others start doing leasing because of the distortion, or benefit, that Sprint has gotten,” Moffett said. “On an as-reported basis, Sprint looks like it’s growing EBITDA at just under 30% and it looks like it’s trading at 5.7-times EBITDA, not an unreasonable number. But if you adjust for all the accounting nonsense, Sprint is actually growing EBITDA at negative 30% and it’s actually trading at 12-times EBITDA.”