AT&T Doesn’t Want You to Leave
In an announcement letter, AT&T has decided to raise the termination fees for its smartphones from $175 to $350 starting June 1st. The early termination fees applied when user break their contract prior to its end term (2-year). The ETF is prorated over time at the rate of $10 per month.
Verizon imposed a similar requirement last November. So this is not unprecedented, however the timing is a little suspicious. Apple is rumored to announce its fourth generation iPhone on June 7th and AT&T could have some exclusivity for a short period.
At the end of the exclusivity agreement in the US, the iPhone could go to other carriers namely Verizon. Discontentment has been expressed loud and clear by AT&T iPhone users due to its 3G network and voice reliability. Verizon has been known for its better coverage.
To sweeten the move, AT&T, will also reduce the ETF for basic and feature phones from $175 to $150. Below is the open letter from AT&T:
An Open Letter to our Valued Customers
May 21, 2010
At AT&T, we work hard every day to provide you with a great wireless experience at competitive prices.
One of the ways we do this is to offer you the industry’s leading wireless handsets below their full retail price when you sign a two-year service agreement. In the event you wish to cancel service before your two-year agreement expires, you agree to pay a prorated early termination fee (ETF) as an alternative way to complete your agreement. Of course, if you prefer not to enter into a term commitment, we offer the same great selection of devices at their full retail price with no term commitment or ETF, as well as prepaid GoPhone options.
We are now making changes that will lower the ETF for many customers who agree to new term commitments, and will increase it for others. Current AT&T wireless customers who are within their two-year consumer service agreement or have an existing enterprise service agreement will see no change to their current terms.
Beginning June 1, 2010, we will reduce the ETF in new and upgrade two-year service agreements for all customers who are buying basic and quick messaging phones. Whether you are new to us or upgrading handsets, the ETF will decrease to $150 from $175, and be reduced by $4 for each month that you remain with us as a customer during the balance of your two-year service agreement. After the term commitment is completed, the ETF will no longer apply.
For customers who enter into new two-year service agreements in connection with the purchase of our more advanced, higher end devices, including netbooks and smartphones, the ETF will increase to $325, and be reduced by $10 for each month that you remain with us as a customer during the balance of your two-year service agreement. After that, the ETF will no longer apply.
Thank you for being an AT&T customer. We hope you enjoy your AT&T wireless device and service. We appreciate your business and we will continue to work hard to earn it.
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