Verizon Wireless is doing away with its one-year service agreement option, citing a lack of customer interest. One Verizon representative explained: “A majority of our customers select a two-year contract when buying our devices, so we are responding to what our customers want.”
The company rep also wrote that customers would still have access to a number of options, including “two-year contracts, month-to-month and prepaid plans.”
One-Year vs. Two-Year Contracts
Verizon’s one-year contract is not as heavily advertised as the two-year agreement. For example, when shopping for a phone on the Verizon Wireless website, the two-year agreement is the default plan displayed, and users must go to a drop-down menu to select the one-year agreement offer. Also, not all products are available with a one-year contract, including the Apple iPhone.
One-year contacts also offer less subsidizing of devices. The recently released HTC ThunderBolt costs $250 with a two-year contract, but $320 with a one-year agreement. $70 seems to be the standard increase in phone price between the contracts.
A one-year agreement is less favorable for Verizon, as it keeps customers locked in for significantly less time, and gives them a greater opportunity to switch carriers and upgrade devices. As of April 17, 2011, the one-year plan will no longer be an option from Verizon Wireless.