Though late to the finish line, it looks like Sprint is finally ready to follow AT&T and Verizon Wireless’ lead and bump its contract termination fee to $350 for “advanced devices.” Sprint confirmed on Wednesday that it will soon increase its early termination fee (ETF) from $200 to $350 beginning in early September. The 75% increase will impact subscribers who purchase subsidized smartphones, tablets, netbooks and notebooks, and the ETF will continue to be prorated as it is currently. The change is set to go into effect on September 9th according to a company spokesperson, and the timing is anything but curious. Sprint is expected to finally begin selling Apple smartphones when the iPhone 5 launches in October, and this big ETF bump is likely an effort to prevent consumers from buying and flying. EBay would likely crumble under the weight of all the new auctions if people were able to purchase the iPhone 5 for as little as $399 with no contract to worry about. More →
Are you an AT&T or T-Mobile small business customer? Sprint wants your business, and it’s offering some pretty compelling discounts to woo you. A leaked internal document says “Come on over to Sprint and see how we can be a great partner,” and it offers AT&T and T-Mobile enterprise customers a 12% discount, 2 handset offers, and $175 CL port-in credit. It’s not as nasty as the carrier’s earlier smear campaign, which asked “Do you have the feeling the AT&T/T-Mobile love connection won’t end with a ‘Happily Ever After?’,” and offered to pay the $175 early-termination fee, but it certainly shows the carrier’s anxiety about the AT&T/T-Mobile acquisition. Sprint has expressed deep concerns about the merger and its CEO, Dan Hesse, said that it will “stifle innovation” in the U.S. wireless market if approved. Sprint’s new deal reportedly runs through July 23rd. Read on for the full image. More →
Speaking of smear campaigns, a new Sprint promotion specifically targets T-Mobile CL customers that may be uneasy about the proposed merger, according to a new report. According to a purported internal document, Sprint is trying to lure customers away by offering to pay their T-Mobile early termination fees up to $175 per line if they switch to Sprint. “Do you have the feeling the AT&T/T-Mobile won’t end with a ‘Happily Ever After?’,” the document asks Sprint distribution partners. “Well, we’ve got a deal specifically for those T-Mobile CL customers having similar concerns.” To sweeten the deal and alleviate any worries for potential T-Mobile defectors, Sprint will also waive subscribers’ ETF fees if the AT&T’s acquisition of T-Mobile is not approved and they choose to switch back to T-Mobile as a result. Sprint has been openly and vocally opposed to the merger since AT&T first announced its intentions to acquire T-Mobile USA from Deutsche Telekom for $39 billion this past March. The carrier’s new ETF credit promotion reportedly begins today and runs through July 23rd. More →
T-Mobile has begun sending letters to remaining Sidekick users in order to notify them that the Danger Services powering Sidekick phones will no longer be operational as of May 31st. T-Mobile first announced the imminent shut down on Tuesday. What can current Sidekick users expect in return for being forced to part with their beloved Danger phones? Half off a select Samsung phone between now and May 31st, or a waived ETF should they choose to take their business elsewhere. Oh, and users will have to sign a new two-year contract should they opt for the discount Samsung phone. Hit the break for the full letter T-Mobile sent affected subscribers. More →
Here is what we have just found out… AT&T recently modified their early upgrade program for smartphones, and due to smartphones becoming “increasingly more sophisticated” — and the cost of the devices increasing — AT&T has increased their $75 early upgrade fee to $200. That means a BlackBerry Bold 9700 that would have cost you $275 will now cost you $399. Quick messaging and basic phones are not subjected to the new change. AT&T told employees that, “This change to our exception pricing is necessary to maintain our ability to provide customers with the best selection of devices and maintain our leadership in the Smartphone category.” And hey, with Verizon charging a $350 ETF for advanced devices, it was only a matter of time before AT&T started exploring their options.
A California appeals court has ruled that Verizon Wireless is to pay some 175,000 customers current and former customers $21 million as a settlement in a class action lawsuit over early termination fees. The class action suit was filed in California on the behalf of customers who were upset that Verizon asked they pay a flat ETF of $175 regardless of how many months were left on their contract. Each customer is expected to receive $87.50 as a result of the ruling. Too bad history is bound to repeat itself now that Verizon’s ETF for “advanced devices” (i.e. smartphones) is set at $350. More →
Yesterday, we mused about AT&T’s adjustment to their ETF pricing as reported by the Wall Street Journal. Late yesterday, AT&T’s PR department decided to put their own spin on the termination fee tweaks with an “Open Letter” to their customers. The open letter confirms that the new ETFs, now $325 for smartphones and $150 for feature phones, will depreciate monthly at a rate of $10 and $4 respectively. We’ve got the full letter queued up for you after the break. Let us know what you think. More →
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? More →
Guess this is Sprint’s big announcement. Effective tomorrow, Sprint will offer a”Sprint Free Guarantee” on all contracts. Anyone who inks a deal with the Now Network will be able to walk away from it within 30 days and not have to pay any sort of fine. All you have to do is hit them up and let ‘em know you don’t want to continue the relationship and return your handset. For being such an upstanding person, Sprint will do so much more than just give you your money back for the phone. They’ll give you back your activation fee, axe the restocking fee, kill off the ETF and, this is a biggie… refund your entire month’s service including surcharges and taxes. We’d say this has a more than good chance of quickly being copied by AT&T, T-Mobile and Verizon, but clearly they’re not desperate enough to risk implementing a policy that looks to be painfully easy to exploit.
Everyone and their mothers were up in arms when Verizon announced its new early termination fee policies last year. For a select group of smartphones and “advanced devices,” canceling one’s contract would incur a hefty $350 fee. Customers fumed, the FCC got involved and Verizon said they were just doing everyone a favor because it allowed them to provide favorable subsidies on handsets. Verizon decided to chop the advanced devices list down a bit by removing 10 handsets, but to be honest, they aren’t the most exciting ones. Included are the Motorola Krave, Samsung Rogue and five LG devices — BlackBerrys and Android devices are still very much in the $350 ETF category. Is this progress on Verizon’s part, or did they just demote those phones to not-so-advanced status?
Here’s a bit of interesting news on the purchasing and cancellation process for the Nexus One. If you buy the device subsidized, and you decide to cancel your contract after the 14-day period (30 days for California) but before 120 days into your contract, Google can charge a termination fee of its own — on top of the carrier ETF. Shocking? Yeah, a little bit. You’d imagine that if you’re paying for a subsidized device and you cancel your contract, you’d just be paying the remainder of the subsidy. Why isn’t this completely surprising? Well, if you purchase a handset with a wireless data plan from an authorized third party, like an electronics store, you sometimes end up getting into the same agreement. Many third-party retailers charge their own fees on top of carrier fees. Still, it doesn’t make it right. Here’s what Google has to say:
Please note that the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.
BGR decided to get in touch with T-Mobile and it is pretty much confirmed: if you cancel after 14 days (again, 30 in California), T-Mobile will charge $200 for breaking the contract, and Google will charge the difference between the subsidized cost of the phone and its full price. Think long and hard before you make the purchase with a service plan: $200 ETF for T-Mobile, $350 for Google and $179 for the device itself will cost you $729 in the end if you cancel. At that rate, you might as well buy it at the unlocked, unsubsidized price. More →
Verizon Wireless responds to FCC complaint regarding its early termination fee and Mobile Web charges
On Friday afternoon, Verizon Wireless issued its response to the FCC complaint which investigated the carrier’s increased early termination fees for advanced devices and the spurious charges some customers incur when accidentally accessing the Mobile Web. As expected, Verizon defended the increased ETF and dismissed the accusation that it charges customers $1.99 for accidentally connecting to the Mobile Web. Verizon justifies its increased ETF by claiming that the fee is not limited to the recovery of the wholesale purchase price of the device. The fee is also necessary to partially offset the cost of running a smartphone network. There is a cost to sell the device (advertising, commission, store costs, device subsidy), a cost to technically support the device, and a cost associated with maintaining a broadband network. Verizon also reminds the FCC that the number of advanced devices is increasing and “the overall cost to the company for providing and supporting devices to customers at low up-front cost has increased substantially”. When asked why a person canceling in the 23rd month of a 24 month contract still has to pay a $120 ETF, Verizon responded by claiming that it “still incurs a financial loss from early terminations, even with the $350 ETF”. If the ETF was prorated to$0 at the end of the contract, Verizon would be forced to charge a higher starting ETF and customers would be worse off. When you consider what Verizon has said about its need to increase its ETF, also consider the fact that Verizon’s revenue from its data services grew to $4.1 billion in Q3 2009, up 48.1 percent and up 28.9percent on a pro forma basis. In the midst of all this talk about expenses, Verizon conveniently left that information out. Now that we have seen what Verizon thinks about its ETF, let’s examine what it said about its erroneous $1.99 Mobile web charges. Hit the jump for all the details. More →
The FCC has taken notice of Verizon Wireless’ new $350 early termination fee that applies to all advanced devices purchased after November 15th, 2009. The governmental agency sent an inquiry letter to Verizon Wireless asking them answer several questions regarding this increased fee. The questionnaire focuses on Verizon Wireless’ disclosure of the ETF to customers and the rationale behind the increase. The FCC also does the math and calculates that a customer with a $350 ETF will still have $120 fee remaining after 23 months into a 24 month contract. It then asks the loaded question, “If the ETF is meant to recoup the wholesale cost of the phone over the life of the contract, why does a $120 ETF apply?” Verizon also gets hit up about the $1.99 fee it charges customers for inadvertently accessing the Mobile Web, and is asked to explain the terms and conditions of such access. Naughty, naughty Verizon has until December 17th to provide its answers.