Verizon eliminates 1-year contracts. gear up for AT&T battle

Verizon will axe its one-year contract option starting April 17, in an attempt to lock in new customers ahead of a showdown with a beefed up AT&T.

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Starting on Sunday, new customers must make do with month-to-month and two-year contracts for their Verizon wireless service. The Basking Ridge, N.J.-based carrier said the change wouldn't affect many new subscribers since most of them already choose to sign two-year contracts.
The underlying reason for this change may be to delay subscribers from jumping ship to an increasingly threatening AT&T when the first year is up.
Verizon, once the largest carrier with 100 million customers, will be surpassed by a beefed up AT&T, with 130 million customers, if the acquisition is approved.
The threats are even more apparent considering Verizon and AT&T now sell essentially the same flagship devices -- the iPhone and iPad -- so nothing would stop customers from switching should a strengthened AT&T offer competitive rates and wider coverage.
Still, service quality and network reliability will ultimately attract customers in the future, and Verizon's move to make customers sign two-year contracts, rather than one, makes sense only if it believes it has the superior service.
Last month, Verizon's 4G service was reportedly more than twice as fast as AT&T's offering, according to PC World, and AT&T's iPhones drop calls more than twice as often as on Verizon, according to research firm ChangeWave.
AT&T may also have difficulty integrating with T-Mobile at first, giving Verizon a chance to lock in disgruntled customers for two years.