Sprint is following Verizon and T-Mobile by getting rid of two-year contracts and phone subsidies. The change will cause users to realize just how expensive smartphones can be, NBC News reports.

The change will occur by the end of the year for Sprint. Sprint, the No. 4 carrier in the United States, will stop offering two-year contracts and reduced price smartphones, like the popular $200 iPhone.

Instead of being able to purchase a phone for a heavily discounted price in exchange for a two-year contract, customers will have to either pay the entire price of the phone or pay a monthly charge to lease the device.

Sprint's CEO Marcelo Claure told CNBC's "Squawk Box" Tuesday that the new policy will save customers money.

Sprint's move to eliminate phone subsidies and contracts follows its rivals' recent moves. T-Mobile got rid of their two-year contracts two years ago and Verizon just announced a plan that eliminated two-year contracts last week. AT&T is the only company that still offers phone subsidies, but that too could end soon. 

Sprint will continue to advertise its "iPhone Forever" plan. With the plan, subscribers lease the phone for $22 per month, pay a service fee, and are free to upgrade to the newest device when it comes out.

The new policies to eliminate phone subsidies will likely lead to an increase in unlocked phones. As Latin Post reported last week, more customers will be owning their phones, making them free to jump to other carriers since they will not be tied to a contract. Once a phone is fully paid off or purchased in full, customers will be able to upgrade to a new device or switch carriers.

"The $199 subsidized device is a thing of the past," Claure said. Now, options will be leasing phones by the month or paying a hefty price on the first day to own them.