Consumers Keeping Their Cellphones Longer

CUSTOMERS KEEPING THEIR CELLPHONES LONGER
[SOURCE: TelecomWeb]
The average cellular phone user is keeping his handset 17.5 months, longer than has been the case in the past, according to a new study by J.D. Power and Associates. The length of ownership is up from 16.6 months in just half a year. While the difference may not seem that great, it is the first increase in average ownership spotted by J.D. Power since way back in 2002, when the average length of ownership was 18.4 months. "One possible reason for this significant increase in the length of handset ownership is that more customers are initiating or renewing their service contracts for a longer period -- typically for two years, as opposed to just one year, which was customary a few years ago," said Kirk Parsons, senior director of wireless services at J.D. Power. Parsons also warned that the increasing length of ownership may be a double-edged sword for carrier. "While these longer contracts help wireless carriers recover the costs associated with offering subsidized cell phones, customers tend to hold on to their current cell phones longer to avoid termination fees when switching service, which may ultimately lead to lower renewal rates," he said.
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