US wireless users hold onto phones longer, higher fees cited

Americans are holding onto their old cellphones much longer because of the bleak economy, and penalties and other fees attached to new purchases are turning off buyers, according to a survey by J.D. Power and Associates.

The report comes as federal regulators are being pressured to impose guidelines to better protect consumers who have seen a rise in contract cancellation penalties by major wireless providers over the last year. In a report released Thursday, the marketing information firm found that in 2010, basic cellphone and smart phone users said they had kept their wireless cellphones for about 20.5 months. That's 17 percent longer than from the previous year and the longest duration since J.D. Power began its survey in 1999. "Typically, when upgrading to a new cellphone, there's the added expense of either subscribing to a more expensive service plan and/or incurring termination fees when switching service providers," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Today, consumers are really watching their wallets, and any added discretionary expenses are being considered more thoughtfully than in the past."