Four different plans, which AT&T Wireless will market as GoPhone, will be introduced in the next few months, the company said. Instead of contracts, GoPhone owners pay a setup fee and are charged a monthly fee that can be automatically deducted from bank accounts.
AT&T Wireless is the latest wireless provider to woo customers who don't want to enter into the usual two- or three-year service contracts, which are usually accompanied by fees up to $200 for terminating the contract earlier than expected.
A partnership between Sprint PCS and Virgin, called, was one of the first plans that didn't require the long-term contracts with termination fees.
During a call with analysts, AT&T Wireless' chief executive, John Zeglis, said the GoPhone plan isn't expected to immediately generate anything more than a "distinct minority" of new phone sales.
"It's an experiment," Zeglis said. "If it doesn't make it, we won't hesitate to pull it out."
Meanwhile, the company reported that its fourth-quarter net loss narrowed by 89 percent over last year. During the quarter, the carrier lost $136 million, or 5 cents a share, compared with a loss of $1.23 billion, or 48 cents a share, a year ago.
GoPhones will be available starting in the next few months at retail outlets, as well as AT&T Wireless phone stores. Additional details about the plans and phones, including prices or airtime minutes, were not available.