AT&T might be taking a hint from T-Mobile by starting to eliminate phone subsidies and service contracts, according to CNET. 

AT&T, which trails Verizon as the second-largest wireless in the U.S., started its new strategy Monday to insist that its third-party partners like Best Buy and the Apple Store only offer the AT&T Next program to their customers. 

This means that customers going to third-party stores will not be offered a discounted phone in exchange for signing a two-year contract. Instead, these stores will only offer the Next program, which requires customers to buy the phone at its full-retail price in monthly installments. These stores will soon phase out subsidies and contracts, but it is not known when it will, according to an AT&T spokeswoman.

AT&T's shift to phasing out contracts and subsidies is a change in a way that customers will pay for pricey smartphones. Normally, customers would get a hefty discount by agreeing to a two-year contract. As a result, their monthly bills were higher. With the Next program, customers' bills are lower, but a monthly fee is added to the bill to pay for the phone. Customers are now seeing how expensive smartphones really are.

The Apple iPhone 6 retails for $650, but most customers do not know this because they pay $199 by signing a two-year contract. With the Next program, customers would have to pay off the entire $650 in either 18 or 24 months.

AT&T will still continue offering phone subsidies and contracts at its own stores, just not at third-party stores, an AT&T spokeswoman said.

The Next program has been a success for AT&T. In the first quarter, the company says that it added 4.1 million subscribers to Next. AT&T also said that more than 30 percent of its customer base use the Next program.

Last week, AT&T announced another option for its Next program, a 12-month version called the AT&T Next 12 with Down Payment, according to Bidness Etc. For this plan, customers will put down 30 percent of the phone's original cost. The rest of the phone will be financed over 28 months. The plan will allow customers to upgrade to a new phone every 12 months.