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AT&T to increase iPhone contract early termination fee to $325

post #1 of 137
Thread Starter 
Starting June 1, new AT&T iPhone customers who wish to cancel their contract with the wireless carrier will need to pay a $325 early termination fee, up from the existing $175 cost.

The new fee will apply to all smartphones, including Apple's iPhone, as well as connected netbooks. For feature and messaging phones, the fees will drop to $150, according to Dow Jones Newswires.

Though there has been speculation that AT&T could lose exclusivity of Apple's iPhone over the next year, an AT&T spokesperson reportedly said that the increase in the ETF to $325 was not related to one specific device.

"The changes come amid increased regulatory scrutiny and class-action lawsuits over the issue," the report said. "The Federal Communications Commission has expressed concern that onerous fees make it difficult for consumers to switch their service. Wireless carriers argue the fees are necessary to recoup the costs incurred by the subsidies they provide to lower the initial cost of the handset."

The change follows a previous move by competitor Verizon, which began charging a $350 ETF for smartphone users. Google and T-Mobile also charged a combined $550 fee for those who canceled their contract on the Nexus One. Both of those recent developments have brought ETFs under scrutiny from the U.S. Federal Communications Commission.

AT&T and Apple offer the iPhone at a subsidized rate, starting at $99 for the iPhone 3G, with a two-year contract for the device. Starting in March, Apple began selling contract-free iPhones at a much higher price, as it has done in previous years, to help clear out inventory before the launch of new hardware.

In addition to recouping lost money from a canceled contract, ETFs are also designed to deter customers from jumping to another network. The timing of the ETF increase will undoubtedly result in speculation about the potential of the iPhone becoming available on a carrier other than AT&T.

Apple is expected to introduce its next-generation iPhone when it kicks off the annual Worldwide Developers Conference in San Francisco on June 7.

Rumors of a Verizon iPhone have been persistent since March, when The Wall Street Journal reported that Apple is working on two new iPhones, including a CDMA-capable model that would be compatible with Verizon's network. That report alleged that CDMA iPhones would not go into mass production until September.

When he was asked this week about the prospect of the iPhone on other carriers, Ralph de la Vega, president and CEO of AT&T's Mobility and Consumer Markets division, said he isn't concerned. He said his company's family talk and business discount plans do a good job of retaining customers.
post #2 of 137
Rogers did the same thing in Canada last year by doubling their ECF fees ($400 ECF for voice and $200 for data). A couple months later Apple announced Bell and Telus got the iPhone (and then Virgin). Likely Rogers got a heads up from Apple and decided more expensive termination fees would help prevent a flood to bell. AT&T has got to be just as concerned. Rogers was in an even worse spot though, since customers that unlocked the iPhones could just move over to the new carriers (I think) whereas AT&T customers would have to buy a new Verizon phone. The increase fee just makes it even more expensive to switch.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
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post #3 of 137
If the ETFs are required for the company to recoup subsidy costs of your phone, then why does the cost of your contract not decrease after two years? Or if you buy an unsubsidized phone, why do you still need to pay that rate? And why can't I buy an unsubsidized iPhone and get a month to month contract with AT&T? Oh, yeah, that's just MORE profit for them then.
post #4 of 137
. . .we like our 3GS phones and AT&T service.

Daniel Swanson

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Daniel Swanson

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post #5 of 137
Quote:
Originally Posted by Tulkas View Post

Rogers did the same thing in Canada last year by doubling their ECF fees ($400 ECF for voice and $200 for data). A couple months later Apple announced Bell and Telus got the iPhone (and then Virgin). Likely Rogers got a heads up from Apple and decided more expensive termination fees would help prevent a flood to bell. AT&T has got to be just as concerned. Rogers was in an even worse spot though, since customers that unlocked the iPhones could just move over to the new carriers (I think) whereas AT&T customers would have to buy a new Verizon phone. The increase fee just makes it even more expensive to switch.

You don't need to quote the whole flipping article -- it's right there in the first post.

That being said, I think this is another indication that Verizon is getting the iPhone.
post #6 of 137
If AT&T changes their TOS and I don't agree with it I assume I will be able to cancel out of the contract. I know a friend who had a phone with another wireless carrier who did just that. Because of the change he was able to cancel the contract without a fee where normally he would have had a fee.
post #7 of 137
That being said, I think this is another indication that Verizon is getting the iPhone.[/QUOTE]

I AGREE.

This could be a sign that Verizon iPhone is on the horizon...
post #8 of 137
AT&T is on the right track to get and keep customers.
post #9 of 137
I read yesterday in the news wherein FCC was saying that there is not much competition in wireless industry in USA. To prove that it's wrong, AT&T decided to get competitive with Verizon and raised the ETF LOL
post #10 of 137
Quote:
Originally Posted by Mazda 3s View Post

You don't need to quote the whole flipping article -- it's right there in the first post.

That being said, I think this is another indication that Verizon is getting the iPhone.

Sorry, my mistake. Corrected. I get used to hitting 'reply' instead of 'post reply'.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply
post #11 of 137
AT&T open letter

Funny, customer that buy feature phones (and presumably have cheaper plans) get their ECF reduced. Customers with smart phones (and higher bills) get their ECF doubled.

So, if you are low revenue, we will make it easier for you to leave. If you are a better customer and pay us more, we are going to make it pain in your ass to leave.

nice.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply
post #12 of 137
This sure seems like an indication that the exclusivity is done next month, and that the iPhone might be on Verizon and others. After paying AT&T over 100 bucks a month for the last year, they sure better have recouped their investment on my 3GS by now and still had enough money to support my measly little service costs to them.

AT&T are beginning to look more and more evil every day. (as if we didn't already know they were)

On a semi-unrelated note, I'm betting that *if* Verizon or other carriers do get the iPhone this year, it'll be a "announce in june ship in a few months" type thing. OTher than occasional rumor here and there I haven't seen too much hard evidence - like a prototype leak or some taiwanese employee video - showing off anything but a GSM phone... which indicated to me that IF there is to be alternate iPhones on any carrier other than T-mobile, they wont come out until probably Holiday quarter. No FCC leaks. No production ramps, and therefore no manufacturer leaks, nothing.
post #13 of 137
Quote:
Originally Posted by bjojade View Post

If the ETFs are required for the company to recoup subsidy costs of your phone, then why does the cost of your contract not decrease after two years? Or if you buy an unsubsidized phone, why do you still need to pay that rate? And why can't I buy an unsubsidized iPhone and get a month to month contract with AT&T? Oh, yeah, that's just MORE profit for them then.

..and why aren't phones automatically unlocked after the contract expires. You have paid off your commitment to them. You own the phone. But are required to continue to pay them to use it.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply
post #14 of 137
Quote:
Originally Posted by OhReallyNow View Post

This sure seems like an indication that the exclusivity is done next month, and that the iPhone might be on Verizon and others. After paying AT&T over 100 bucks a month for the last year, they sure better have recouped their investment on my 3GS by now and still had enough money to support my measly little service costs to them.

AT&T are beginning to look more and more evil every day. (as if we didn't already know they were)

On a semi-unrelated note, I'm betting that *if* Verizon or other carriers do get the iPhone this year, it'll be a "announce in june ship in a few months" type thing. OTher than occasional rumor here and there I haven't seen too much hard evidence - like a prototype leak or some taiwanese employee video - showing off anything but a GSM phone... which indicated to me that IF there is to be alternate iPhones on any carrier other than T-mobile, they wont come out until probably Holiday quarter. No FCC leaks. No production ramps, and therefore no manufacturer leaks, nothing.

I think you are right that it won't launch immediately with Verizon. If so, then this announcement wouldn't help AT&T, since they say existing customers won't have their fees doubled. But if AT&T knew verizon wasn't getting it for a few months more, then this would help lock in any new customers/contracts that sign up for the 4G.

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply

"My 8th grade math teacher once said: "You can't help it if you're dumb, you are born that way. But stupid is self inflicted."" -Hiro. 

...sometimes it's both
Reply
post #15 of 137
The article clearly says this only goes into effect for new contracts after June 1. It does effect anyone under a current contract.

Quote:
Originally Posted by xStatiCa View Post

If AT&T changes their TOS and I don't agree with it I assume I will be able to cancel out of the contract.
post #16 of 137
This is proof of three things: (1) Verizon will get the new iPhone. (2) AT&T is afraid of the Verizon iPhone. (3) AT&T is truly evil. Almost as evil as Google and Microsoft combined. I mean, almost doubling the termination fee because people will want to switch to a phone carrier that works?
I am the Great Bug

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I am the Great Bug

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post #17 of 137
Been on the fence about dumping ATT and now that Android is a viable option this helped me make up my mind. When my contract's up ATT is history. Hello to Verizon.
post #18 of 137
And there goes my plan to use an iPad SIM in my v.4 iPhone...

I bet that AT&T knew about this possibility as well.
iPad SIM for $30/month without contract = unlimited VoIP, unlimited SMS with GV, and unlimited data (obviously).

It still makes sense to go the iPad route financially, but it's probably not worth the hassle anymore.
post #19 of 137
Quote:
Originally Posted by bjojade View Post

If the ETFs are required for the company to recoup subsidy costs of your phone, then why does the cost of your contract not decrease after two years? Or if you buy an unsubsidized phone, why do you still need to pay that rate? And why can't I buy an unsubsidized iPhone and get a month to month contract with AT&T? Oh, yeah, that's just MORE profit for them then.

There's nothing wrong with profit but this is a thumb in the eye of customers already irritated with ATT - like me!
post #20 of 137
Not necessarily. It does mean AT&T is soon to get a new iPhone.

If VZW can get away with higher ETF for smartphones with no phone that is nearly as popular ad the iPhone. There is little reason AT&T could not follow suit.

Quote:
Originally Posted by Mazda 3s View Post

That being said, I think this is another indication that Verizon is getting the iPhone.
post #21 of 137
I don't see anything wrong here. AT&T's offering a pretty large discount here.
post #22 of 137
Quote:
Originally Posted by DanielSW View Post

. . .we like our 3GS phones and AT&T service.

Until your contract expires and you're looking to upgrade to that shiny new 4th generation iPhone.
\Apple has always had competition. It's just been in its blind spot.
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\Apple has always had competition. It's just been in its blind spot.
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post #23 of 137
We as a nation should never have let Cingular and AT&T merge, or let VZ buy Alltel. This is what a lack of competition does. Sprint is the only other real competitor, but who's to say they won't follow suit. T-Mobile? Please, that company doesn't even register on the radar of VZW or ATT, or companies looking to do business with wireless companies here in the States.
post #24 of 137
As others have said, this is really a non-issue.

1. Verizon is already at this price level

2. AT&T (dunno about V) has a pro-rated ETF so it goes down by what $13 a month on a 2 year contract?

3. This is also pretty normal ETF for other counties too.

Meh... nothing to see here... and don't get me wrong, I'll be the first to dog-pile on AT&T or Verizon for just about any 'abusive issue' but this just isn't one of them.
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Apple Fanboy: Anyone who started liking Apple before I did!
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post #25 of 137
Apple needs to provide an unlocked iPhone as an option. Unfortunately, with these kinds of termination fees I'm seriously considering moving to an unlocked android phone.
post #26 of 137
Quote:
Originally Posted by kent909 View Post

That's because we have a Congress controlled by Democrats, and for the most part are cowards that don't have the guts to pass legislation requireing the ETF to reduce over the length of the contract.

Prorated ETFs for AT&T went US wide in 2008 and if I'm not mistaken was always the case for those of us who live in NJ.

http://www.wireless.att.com/answer-c...&t=solutionTab

Oh and while I'm a card carrying fiscal conservative lets not start in with Dem vs. Rep comments... After all it was a Democrat in the presidency when the Antitrust case was opened against Microsoft... but thats really not the point.. at this point in time we all know that the party doesn't really matter all that much any more, its the well funded lobbyists who run DC now-a-days. The only thing that changes is who the checks are written out to.

Cynical?!!? Me?!?! No way!
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Apple Fanboy: Anyone who started liking Apple before I did!
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post #27 of 137
Unfortunately, the FCC has allowed the business conditions to arise where there is no real competition among carriers. T-Mobile is no real competition to AT&T. Yes, you can switch to one of the CDMA carriers, but you can't take your phone with you. It's time the FCC fosters some real competition in the cell phone service market.
post #28 of 137
Someone is worried that people may switch from the iPhone on AT&T to something else...

Besides that, we all know these phones are heavily subsidized. You can't just go about giving away money to people who are taking their business elsewhere.
post #29 of 137
Quote:
Originally Posted by DaveGee View Post


2. AT&T (dunno about V) has a pro-rated ETF so it goes down by what $13 a month on a 2 year contract?

Verizon prorates their ETF. Though they start a bit higher at $350.
\Apple has always had competition. It's just been in its blind spot.
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\Apple has always had competition. It's just been in its blind spot.
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post #30 of 137
Quote:
Originally Posted by TenoBell View Post

The article clearly says this only goes into effect for new contracts after June 1. It does not effect anyone under a current contract.

It is worth making your observation larger. Not that anyone, with a few exceptions here, will understand it.
post #31 of 137
Quote:
Originally Posted by TheGreatBug View Post

This is proof of three things: (1) Verizon will get the new iPhone. (2) AT&T is afraid of the Verizon iPhone. (3) AT&T is truly evil. Almost as evil as Google and Microsoft combined. I mean, almost doubling the termination fee because people will want to switch to a phone carrier that works?

It is possible that the increase of the ETF might indicate a loss of exclusivity, although AT&T is increasing this for all smartphones, not just Apple's handset.

I still don't think that Verizon is getting the iPhone so soon because of two major reasons: A.) there has been no hiring frenzy of CDMA engineers by Apple, and B.) Verizon's executives have been too chatty about the iPhone (and there are far too many dumb rumors). Normally, Apple's business partners clam up real tight when there's a deal in the works.

If Apple drops carrier exclusivity here in the United States, the most likely step would be to add T-Mobile USA. It's worth pointing out that T-Mobile has been rather quiet about the iPhone as of late.
post #32 of 137
If your contract is up, but you don't want to get a new contract, just keep paying your monthly bill, and don't worry about signing a new contract.

I've been doing this for years without any problems.

YES, they will tell you, that you need to have a contract, but they never shut me off? I've gone as much as 18 months without a contract without any problems or issues.

Skip
post #33 of 137
Quote:
Originally Posted by AppleInsider View Post

Starting June 1, new AT&T iPhone customers who wish to cancel their contract with the wireless carrier will need to pay a $325 early termination fee, up from the existing $175 cost.

Curious to see if this means the iPhone is going to Verizon and AT&T is trying to keep folks from jumping ship without paying for it in a major way.

If VZ does get it not sure if I'll switch - party depends if they by some way they can allow calling and internet/email use at the same time, but mostly the coverage in the Bay Area.
post #34 of 137
Quote:
Originally Posted by xStatiCa View Post

If AT&T changes their TOS and I don't agree with it I assume I will be able to cancel out of the contract.

You realize that anyone currently on contract doesn't get the new rates right? However if you get the new iPhone or another smartphone, you will get the new charges since you sign a new contract.
post #35 of 137
Quote:
Originally Posted by bjojade View Post

Or if you buy an unsubsidized phone, why do you still need to pay that rate?

Are you asking if you pay full price will you still have an ETF? If so, the answer is no. You may be on that two year contract, but the ETF doesn't apply since you paid full price. Month to month would be nice however...
post #36 of 137
Quote:
Originally Posted by ncee View Post

If your contract is up, but you don't want to get a new contract, just keep paying your monthly bill, and don't worry about signing a new contract.

I've been doing this for years without any problems.

YES, they will tell you, that you need to have a contract, but they never shut me off? I've gone as much as 18 months without a contract without any problems or issues.

Skip

Works fine if you have no issues using the same device. Once you look to get that new one, that's where they get you.
\Apple has always had competition. It's just been in its blind spot.
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\Apple has always had competition. It's just been in its blind spot.
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post #37 of 137
Quote:
Originally Posted by ncee View Post

If your contract is up, but you don't want to get a new contract, just keep paying your monthly bill, and don't worry about signing a new contract.

I've been doing this for years without any problems.

YES, they will tell you, that you need to have a contract, but they never shut me off? I've gone as much as 18 months without a contract without any problems or issues.

Skip

1. contract prices are high to payback subsidies, this makes sense.
2. when your contract is over, you still have to pay the same price, that's makes no sense.
3. charging ETF for the iphone to get the subsidy back if you leave early, that makes sense
4. refusing to unlock your iphone after your contract is over, that should be illegal.

i dont mind current plan costs and ETF if they were to be implemented fairly. The right thing to do is provide non contract prices and iphone unlocks after your contract ends.

then there's also the SMS cost issue. they charge for sending and receiving? same with minutes on your plan, they charge minutes for making calls and receiving? that outrageous, they should only charge the person sending SMS or making a phone call. I visited a third world country where politicians are corrupt, and yet they're cell phone service charged sms and minutes only to the person sending sms or making calls.
post #38 of 137
Bravo AI!

It's all smartphones, not just the iPhone.

More important, it's $25 less than Verizon's $350 early termination fee.
post #39 of 137
Worthless greedy pigs! They know Verizon is coming and they want to soak you for bailing out come this fall.
post #40 of 137
Quote:
Originally Posted by dbtinc View Post

Been on the fence about dumping ATT and now that Android is a viable option this helped me make up my mind. When my contract's up ATT is history. Hello to Verizon.

Right, this makes sense ???? - Because AT&T raised their ETF to $325 your going to jump to a carrier whose ETF is $350. Your the kind of customer that Verison likes - unaware.
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