Why you’ll soon love your cellphone contract

[Commentary] Cellphone contracts suck, but pretty much everyone in the U.S. still has one.

For the vast majority of people, signing a contract is the only way to get the phone they want for a price they can afford. But contracts present problems: They’re 24 months long, but phones typically have issues after the first 12 months (when manufacturer’s warranties have expired); if a phone is lost, the contract still stands, yet the consumer has no phone; and newer phones that are far more desirable are released yearly or more frequently, yet consumers are stuck with the same old phone. But carriers need contracts about as much as consumers disdain them. It’s the only way to ensure that consumers will be there month after month, allowing carriers to recoup the investment they make in phone purchases. But what if all of this changed? What if consumers actually enjoyed signing contracts? What if carriers just gave away phones — all of them — for free?

Carriers need to rethink the current model of phone ownership. How about the carrier owns the phone, and it must be returned after the 12 months is up. Moreover, instead of signing a two-year contract, consumers would have to sign a four- to five-year one. But, and this is a big but, when a consumer gives that 12-month-old phone back to the carrier, they’ll get a brand-new one of their choice — every single year of the contract.