Nov. 5 (Bloomberg) -- Verizon Wireless, the largest U.S. mobile-phone carrier, plans to double the fee customers must pay for terminating a smart-phone contract early.

Termination fees for Research In Motion Ltd.’s BlackBerrys, new Droid devices and other smart phones will rise to $350 from $175 on Nov. 15, Verizon spokesman Jim Gerace said today. Charges for ending contracts early on regular mobile phones will stay at $175.

Verizon is trying to make the termination fees correspond more closely with the actual prices of the phones, which the company subsidizes, Gerace said. The cost of early termination for a smart-phone contract will decline by $10 for every month of service.

“The cost of smart phones is considerably higher than feature phones for which the early termination fees were created years ago at $175,” Gerace said. Customers also have the option of paying full price for a phone without a contract, he said.

Verizon Wireless pays more than $200 to subsidize some of the smart phones, and it sees the termination fee as a way to protect its investment, Roger Entner, an analyst at Nielsen Co., said in an interview. The company counts on extra revenue from data plans, which allow subscribers to access the Web, to recoup the cost.

Hard for Consumers

The higher fees will make the wireless market less competitive and prevent customers from switching contracts to get better deals, according to a statement by the Consumers Union.

“When people want to switch wireless services, the biggest cost they face is early termination fees,” Joel Kelsey, policy analyst for the advocacy group, said in the statement. “Early termination fees are designed to lock people into long-term contracts and stop them from getting better deals.”

Verizon Communications Inc., which co-owns Verizon Wireless with Vodafone Group Plc, rose 21 cents to $29.31 at 4 p.m. in New York Stock Exchange composite trading. The stock has fallen 14 percent this year.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: November 5, 2009 18:27 EST