There is one universal truth when it comes to cellular contracts in the U.S. -- they are normally two years in length. In Europe, wireless customers routinely get better deals than Americans with phones as popular as the iPhone offered for free with contracts as short as a year and a half.
Alltel has made a move that will set it apart from its peers in the U.S. wireless market. The company announced today that it would be cutting the length of its wireless contracts from two years to one year in an effort to entice more consumers to its network. Despite cutting the length of the contract required for subsidized phones in half, Alltel says that it will not up the price of its phones to compensate.
Alltel's Paul Bowsersock said in a statement, "Wireless customers have been waiting for an option like this for a long time. With a one-year contract option, customers can take greater control over their wireless experience, having the flexibility to choose their contract length and the latest innovative handsets at the most competitive price possible."
InformationWeek reports that mobile carriers contend that a two year contract is needed to recoup the cost of the subsidized hardware. It’s unknown if Alltel's move will spur other major carriers like Sprint, AT&T, and Verizon to offer similar plans.
Alltel may lack a buzz generating handset like the Palm Pre or the iPhone, but the provider does offer handsets like the Blackberry Pearl Flip and Treo Pro. Verizon purchased most of Alltel's assets last year but Alltel still has about 2.2 million customers in 22 states.
quote: Australia has 80% of the US land mass, and less than 10% of the population. Yet we have on the order of 98% coverage for cellular networks, with at least two carriers available to the majority of those customers.
quote: If the standard 2 year contract length is to recoup the price of the phone, how come the cost of the plan does not go down after 2 years? I would hang onto my old phone longer if the plan got cheaper after the contract was up.
quote: My wife works in cell phones