AT&T to raise ETF on smartphones, lower ETF on feature phones

By on May 21, 2010 at 3:30 PM
Services May 21, 2010

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The Wall Street Journal is reporting that AT&T will raise the early termination fee on its line of smartphones from $175 to $325 starting June 1st. The move is inline with adjustments made by Verizon Wireless to their ETF policy last November. The math is pretty simple: a BlackBerry 9700 at retail is $449 — if you buy the phone for $199 with new 2-year contract, then cancel for $175, you’ve just paid $374.  Under the new scheme your price, with penalty, would be $524 ($75 over retail in this example). The new ETF will not apply to existing contracts, just those of you who are inking new 2-year deals with the Death Star. They news isn’t all bad [yes it is], as the WSJ went onto say that feature phone ETFs will shrink by $25 to $150. What do you think? Is this higher smartphone ETF going to dissuade anyone from putting their name on another AT&T contract?

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  • Loki

    No company Pays retail pricing on any phone model they carry. and to think a customer that comes to there network should pay full retail if they cancel early is sheer BS. you should only have to pay the actual cost of the phone to said company. they make there money though over priced service and data plans. so much for GOV regulation on the telco’s, one raises there price in this case ETF area a few months later the rest fallow seem to fallow where is the competition?

    • Sprinter

      Amen.

    • jbocat

      The company pays the price the manufacturer puts out there (retail pricing) and then if a customer wants to buy it outright from them, it’s a little higher than the company paid (Lots of administrative costs go into this as well. You are paying people’s salaries you know). Seems like you want manufacturers to sell direct to people then telco’s to be service providers only. Ask Google if that works…I’ll wait.

      • Sprinter

        When the 9700 was first released I got one from an AT&T store for $350 without a contract extension (I remember this because I was surprised that the phone was $100 less in store than online) or I could have extended my contract for 2 years and paid $200 for the phone. So if I bought the phone with a contract for $200 and then later canceled the contract I would have to pay $550 for the same phone I could have purchased outright for $350. This makes sense how? And please don’t tell me that AT&T knocked off a few hundred dollars from the price because they went nonprofit for the afternoon.

        Think what you want, but a $350 ETF is excessive. And retailers don’t pay retail, they pay wholesale. Consumers pay retail which includes a considerable markup to cover the aforementioned costs.

      • ivwshane

        When the primary phone you sell has a $400 subsidy in it $350 does not seem excessive.

      • Sprinter

        The phone I bought didn’t have any subsidy. I bought it outright, but had it been subsidized it would have been a $150 subsidy if you go by retail.

    • Barry S

      “so much for GOV regulation on the telco’s”

      That GOV regulation you love so much results in taxes and fees added to your bill that far exceed the ETF. I understand some people are incapable of taking care of themselves and need the government to do their thinking for them. I say “no thanks”.

    • WIlly Wonka

      You are a f*cking moron. For example if a company orders 10,000 handsets @ full retail of $500, the manufacturer may throw in an extra 1,000 handsets, most of which go to executives, or stores for demo purposes. Carriers do not make their money back until the 10-13 month mark. So all you idiots who cry and bitch about phones. Sign one year contracts or keep your bitching up and when the US carriers stop offering equipment at discounted pricing like they do in Europe, you will only be able to buy $500 handsets. Prick.

      • Sprinter

        And, with a $350 ETF falling $10 per month at the end of 23 months leaves you $120 ETF to get out of your contract on the 23rd month of a 24 month contract. If the carrier made their money back on the handset at the 10-13 month mark then why penalize people after that point? Also, you would be a idiot not to take the subsidy unless you are on T-Mobile where your monthly bill doesn’t have the cost of the subsidy built in.

  • bluehorseshoe

    Hmmm…are they beginning to see some of those iPhone customers leave? I know a few that have taken the Android route…$300+ would make you think twice before leaving.

    • TomTpm

      Huh? Andriod phone in Verizon have a higher ETF? BOth AT&T and Verizon have record low churn?

      Try again

      • Scorpeo

        You’re misunderstanding what he’s saying, At&t are jacking up the ETF fee to keep customers from leaving for Android. This is in direct response to the Incredible and the forth coming EVO. I know of many At&t customers leaving for the EVO.

      • I’m on Verizon but headed to Iphone country

        because they are EVO fanboys

      • ivwshane

        Considering the new ETF’s don’t affect existing customers, would you like to try again?

      • maybe heh

        Maybe its a sign that the new Iphone can’t compete with the Droid units that VZ is going to dish out this year. Anyone that gets the new Iphone is going to be locked into a two year commitment since they refuse to sell it without contract.

  • Verizon Guy

    OK, this pretty much confirms it. Verizon will have an iPhone in 2010. AT&T is jacking up ETFs now to lock in any subscribers with months left on contract.

    • jbocat

      I don’t see how it confirms anything. AT&T has just realized that they could be more profitable than they currently are.

      • TomTpm

        You have zero facts around that statement.

      • I’m on Verizon but headed to Iphone country

        I think thats his opinion

      • TomTpm

        Yep – that’s my point. ZERO facts – been hearing the same for 2 years.

        And why do all you Verizon fanboys continue to cll for the iphone when you bash it all the time?

    • benr

      VZWguy: Did YOU read the blurb above?

      “The new ETF will not apply to existing contracts, just those of you who are inking new 2-year deals with the Death Star”

      NEW contracts .. not ” OMFG! I have a 3G/3GS and now I want the 4G/HD on VZW! I must leave my 22 month old contract with Megatelco! ”

      heh!

    • TomTpm

      Verizon Guy – don’t you get tired of posting that Verizon is getting the iPhone? I guess you will get it right at some point…

      AND by the way – i thought you “Verizon” guys commonly call the iPhone a crappy device – that Andriod will save the world. Why do you even care?

    • justme

      not an option for vzw, at&t and apple extended their agreement so at&t would give them the data pricing on ipads…. plus apple didnt fork over millions in advertising the iphone to talk and surf the same time so they could throw it on an antiquated cdma network to have lower internet speeds and do less… try again

      • ChaseS

        yes cuz me making a COMPLETE and CLEAR call on CDMA as well as surfing the web fast….yes that completely makes CDMA crap…

        But I guess Justme…you would rather have a brick most of the time…well a “fun” brick, than a real actual working phone…..

        Iphone on VZW is going to happen, just not at this exact moment….

    • ivwshane

      Again with these idiotic comments!

      How does a higher ETF that does NOT affect existing customers lock in existing customers?

      Are all verizon people idiots?

  • NuShrike

    How is this fair when there’s no difference between subsidized and non-subsidized contracts?

    I still pay the $3xx ETF even if I bring my own smartphone? It’s not like there’s an Even More Plus-like contract plan which lets us pay less for bringing/paying our own hardware.

    WTF! T-Mobile USA at least has a clue and doesn’t blatantly rip off customers like this.

    • Random Reply

      You do not pay an ETF if you bring your own smartphone. If you bring your own device, you can activate without signing a contract and merely accept the terms and conditions of contractless postpaid service instead. This service may not be available through an automated system and you might need a human being in person or over the phone to do this for you. You do not, however, pay less for service if you bring your own device.

  • Art

    VZW iPHONE and HTC EVO are around the CORNER!

  • ThinkTank

    Posted on MyCSP today (AT&T’s employee site):

    Beginning June 1, 2010, AT&T is making changes that will lower the early termination fee (ETF) for many customers who agree to new term commitments, and will increase it for others.

    Customers who are buying basic and quick messaging phones will have a lower ETF of $150, reduced by $4 for each month during the balance of the service agreement.
    Customers who purchase a more advanced, higher-end device, including Netbooks and Smartphones, will have an ETF of $325, reduced by $10 for each month during the balance of the service agreement.
    Current AT&T wireless customers who are within their existing service agreement or have an existing enterprise service agreement will see no change to their current terms.

  • Ray

    Just another reason why I’m running an unlocked phone from e-Bay and have been out of contract for a couple of years now. Maybe I will jump ship to Sprint when the EVO 4G comes out, I’m in a 4G area and they give you a new phone discount every year as opposed to every 2 years.

  • hillbill

    It is clear that the new ETF policy will not affect existing contracts. So how in the world is it going to prevent people from leaving once the contract is over. Stop talking out of your other mouth.

  • lucas

    loki, learn the difference between they’re, their, and there. if you can’t get that down, it discredits your whole opinion.

  • Diddy Loco

    I haven’t kept a phone for more than a year so that the fact that carriers with mediocre (cough AT&T cough) keep coming up with ways to gouge customers is just sad now.

    Lets be honest the carriers make up their phone subsidy and then some in 6 months of the contract (I don’t have facts, i’m just willing to bet this is the case) and realistically the MAJORITY of users are going to be with their carrier AT LEAST those six months.

    I wanted to iPhoneHD but given the impending rise of Android there’s really no reason to lock myself into any kind of contract with AT&T any more.

  • Dogfather

    Simple u don’t want 2 yrs contract with them go with another carrier, they have the right to protect their business of those guys who buy the iphone with a discounted price and then use it unlocked somewhere else, if Tmo users want an iphone buy for a full price….!!!!

    • Hanz Gruber

      Agreed. Rumor has it that there are over 3 million iPhones on T-mobile right now most of which were likely bought with a healthy subsidy from ATT. I’m sure they learned their lesson and they don’t want to see that happen again with the new iPhone coming out this summer.

  • Capt.Obvious

    Capt.Obvious here… this will Obviously lock in anyone wanting to upgrade to the new iPhoneHD. Obviously att wants to lock-in customers who may bolt for Verizon when Apple creates an LTE version of the iPhone.

  • Mrwirez

    Just FAIL. I hate ALL the Networks, including my only choice of cable… Comcast. This includes VZW & AT&T too.

  • drew dogg

    Okay if you guys don’t like the etf then just pay the full retai, no one is stopping you. Hello the biz is about one thing MONEY! Don’t for a second ever think it isn’t.

  • Nana

    I always buy my phones full retail and never have an issue selling them on ebay usually close to what I paid for it. I switch phones often.

  • Dad

    this was so obvious. When VZW did this it was only a matter of time before ATT followed. These corporations are out for $$$ not for XOXOXOXO.

  • JP

    The end of the free ride is upon us. You can thank the meat-heads who upgraded a line with a smartphone and later decided to sell it, cancel their service and pay the small ETF that was in effect.

    Now the big 2 have smartened up. What’s that saying? It only takes one rotten egg to spoil the bunch?

    Me, I’ll be buying my phones without contract from now on. If I decide later down the road I want to leave, it’s a done deal. I’ll sell the phone and be-gone.

    Please, don’t tase me bro!!

  • walt

    With the full retail on iPhone being a $400 jump from subsidy price, you’re still better off signing and paying prorated ETF if you decide to leave. I can’t blame AT&T with the number of people that activate 32g 3GS and selling on Ebay and cancelling right away.
    You can blame those people, not the carrier who’s trying not to lose money of their most popular and most expensive (cost wise)device.

  • CD4L

    I have to give credit to T-Mobile. Their Even More Plus plans are good. If you pay full price, your monthly plan is reduced, the $80 monthly for Unlimited Talk, Text, Web and email is great!

    I would not mind paying full price on AT&T and VZW but if I pay full price, then I should get a reduced monthly plan. Sorry I don’t see the advantage to paying $500 to $600 up front for a phone and still get shafted monthly. If a customer is going to shell out money up front and pay full price, then guess what AT&T and VZW, they get a whole separate price plan.

    But it doesn’t matter to me, I will never sign, I will not let my wife sign.

    • CD4L

      Or I should say, my wife agrees with me and will never sign as well.

  • Boogaloo

    @ Willy Wonka,
    When is this contractless, subsidyless, European idea going to die? Look at any European phone site and see that not only do they offer/push contracts (12, 18 and 24 months) but they give much greater subsidy on handsets than the US. They also base subsidy off of a sliding scale of monthly service price (the more you pay monthly the less you pay for the handset).

  • dwayne

    Seems to me that these carriers are trying to keep the churn down. I understand it. One effect it will have, is that people have to utilize their 30 day window a little better now. After that grace period ends, you are pretty much locked in unless you want to come out of your pockets deep.

  • Ocergj

    I wouldn’t renew with Verizon when they up’ed their ETF’s, and I won’t renew with AT&T now.

    If they want to stop losing money on early terminations, stop subsidizing the phones. I’d rather pay for a phone up front, and if I can’t afford it, then I won’t buy it. They subsidize so people who can’t afford the phone, now can, and then hit them with over priced service and data fees.

    I have no sympathy for the phone carriers…they’re almost as bad as the airline carriers!

  • Fattychance

    I have a friend who operates a sprint store. The evo is $350 at cost to him. The customers pay $300 and get $100 back in rebate. They aren’t losing any money on their $150 etf.

    The people selling it make their money on the contract. The carrier will lose money if people walk away too quickly….but very little. They collect activation fees and a months service, etc.

  • LuckyLuciano2010

    @CD4L,

    leave it to the one who wears the pants in that family…

    Posted from BGR Mobile (iPhone).

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