1 Year Wireless Contracts Needed With New Phones

As high end phones are released on a recurring basis, it is time for the return of 1 year wireless contracts in the US.

 
We are evolving in the mobile device world and while I am focusing on wireless carriers here in the US, this does apply around the world. With the likes of Apple operating on a annual release cycle for the iPhone, there needs to be a return in the wireless carrier community to 1 year wireless contract. I know that you can probably find them for some carriers, but they are not wide spread and the largest carriers are not selling them. The idea of offering a 1 year wireless contract from the consumer point of view is the direction where things should be headed. But for the wireless carriers, it is not nearly as profitable for them because of the much higher termination fees when you want to purchase a new phone in less than 2 years. They realize just how much money they can make from those individuals who are more than willing to buy a new Apple iPhone whenever a new one comes out. And when they do, the wireless carriers point to the early termination clause and collect a lot of money.

All of this is going to be increasing as a topic of conversation and that is because of all the great new smart phones which are coming out. You only have to look at Apple and the new iPhones that come out close to the annual date of the previous version. Some times it is longer and some times it is shorter, but this is becoming the norm. Take for example the coming Galaxy S3 which is the successor to the Galaxy S2. Or the Apple iPhone 4 and the iPhone 4S which came out late, almost 16 months later. There is the various Droid models coming out this year, some of which are earlier than the annual period, such as the Droid 3 and the Droid 4 which came about 7 months later. Technology improvements are starting to happen at a far faster pace than before. Moore's Law is now being applied to mobile devices.

It is not like there has not been 1 year contracts being offered by wireless carriers in the US. Sprint reversed their 1 year wireless contract last fall and with that left another hole in the options for people. This was made effective on October 2nd. This was pretty much only to renew your existing contract for another year, not for signing up for a new service. This was a great deal for Sprint customers, but no more. Verizon Wireless ended their 1 year contract back on April 2nd, 2011 and it too was a great way to purchase a new phone on an annual basis. All of that has fallen away and it is now time for wireless carriers to revisit the idea of 1 year wireless contracts.

In the event that wireless carriers in the US were to bring back 1 year wireless contracts, we know that the subsidized price of the smart phone would be much less than with a 2 year contract than a 1 year contract. This would be the expected result of a change like this. The market wants to see this with the quickly changing technology which is out. When you buy a smart phone today, there is something better coming 6 months later. By the time that you get to 1 year later, there is even more improved technology available and usually from the same manufacturer as the phone you own. But you are locked in a 2 year contract. Those who purchased the latest iPhone will want to purchase the latest iPhone 5 when it comes out, but they have few choices. They can terminate their current contract and pay the early termination fee or wait until their 2 year contract expires. Not much of a choice.

All of this points out the need to return to the option of purchasing a 1 or 2 contract for phone services. It is that option which will give people the option to get a new phone every year if they so choose. Sure, the 1 year contract will cost more. But, technology is changing so fast now it requires a 1 yer contract to take advantage of that changing technology. How we convince wireless carriers to offer that is an unknown and only public pressure may be the only thing which can get them to change.

Do you want to see 1 year phone contracts again?