It appears that Verizon Wireless is planning on doubling its current early termination fee (ETF) for smartphone customers from $175 up to $350 beginning as of 11/15/09. The prorating-per-month will stay: $10 for each month of service completed, which still means that a subscriber completing almost 2 years (23 months) would still owe an ETF of $120.
What makes this of particular relevance to the PreCentral community, beyond the near-certainty that Verizon Wireless will begin marketing the Pre and/or other webOS devices in January 2010, is that this increased ETF will reportedly affect "customers purchasing an Advanced Device." We're fairly confident that the Pre will fall under that category, so buyer beware.
Hopefully, to the extent that Verizon Wireless is making it harder to leave the service, it will also make it easier to join, with significant subsidies on webOS devices when they hit its network. Dare to dream, friends.
Comments
double their EFT fees and pay to much for their service, why are people so loyal to Verizon?
Some People Just Dont Know Any Better
likewise, as idiotic as they can be, Sprint will be sure to follow....
Sprint has been brilliant recently! Low prices, any mobile any time! They generally don't appear to follow negative trends either.
I'd be surprise to see Sprint follow; I would expect AT&T to do so, but not Sprint.
What planet is MilenkoD on? Sprint is giving everything away while Verizon keeps raising their rates and fees.
oh, I don't know, maybe that same planet where Sprint pulled up lame matching data caps, free number calling feature. When Sprint sees others on a trend they seem to follow. This just seems like one of those things that can help them control or limit churn.
I thought Sprint actually led the way on this as well. S-canning customers that were using EVDO via tether to download movies and the such all day and sent a clear message, "abuse 'unlimited' but don't overabuse 'unlimited;". I abused the crap out of EVDO 4+ hours of heavy streaming while commuting via train and they never blinked at my use. If someone is using it as a home connection and pulling heavy downloads via unsanctioned tethering, I guess they're taking their chances.
This is so very typical of Verizon. I moved to Sprint and have no regrets. The only thing I do have is more money in my pocket to buy a newer phone at discount every 12 month. Thank you Sprint.
The math is a little faulty. After 23 months, you would owe $120, not $140.
I don't understand how Verizon can not prorate the ETF down to zero in month 24. Wasn't that the point of the courts getting involved and saying ETF fees had to be prorated?
The Sprint ETF bottoms out at $50.
Just another reason for anyone considering a Pre but hating AT&T to come to Sprint. Hopefully this will help boost some of Sprint's numbers, though I'm not holding my breath.
he corrected the error, he was off 20 bucks, not that big of a deal man.
The Canadian cell phone carriers regularly charge $20 per month left on the contract to cancel, on top of the fact that you need to sign a 3-year term to subsidize much more than $100-200 of the phone's cost. If you have less than 5 months left, then early termination is $100. Keep in mind that you've already had the contract for 31 months. The maximum ETF for Bell and Rogers contracts is capped at $400, whereas Telus doesn't have a cap. Want out of your 3-year term after only a few months? Be prepared to pay upwards of $600.
http://www.cbc.ca/consumer/story/2008/09/02/f-diconnected-contracts.html
Not saying that this doesn't suck for Verizon customers, just saying it could be much, much worse. Also, the trend of terrible math continues on this blog with $350 - $230 apparently equaling $140, instead of the correct $120.
Gee dude chill, he ain't a robot. It's fixed.
Sorry, but I hadn't refreshed and had written my post before I saw that he had changed the price figure. The point still stands though.
Premature recalculation? Dammit, think about baseball, not flaming Jonathan.
I hate baseball.
OK, so what else can Sprint do to attract more customers? Their major competitors are screwing with their customers left and right. With all the crap from VZW and ATT, wouldn't you have to be practically stupid not to switch?
They can talk Palm into making better commercials. I think the Pre is clearly superior to the iPhone, but Apple's actually got commercials showing what the iPhone can do. Palm's commercials show a quirky chick touching her phone.
Sprint itself can make "crunchy" commercials. Point out how much cheaper Sprint is than other carriers. Acknowledge past problems with customer service, and use real people to talk about how excellent CS is now. (I'd do it, and two years ago I was ready to declare a fatwa on Sprint.)
The "Heroes" Sprint commercials are just stupid. Simply showing a phone and logo doesn't cut it when you're trying to gain market share. You need to tell people why they should switch, not simply flash your logo at them.
/agreed.
That sucks. So now if you go Verizon you'd have to pick your phone WISELY.
Muhahahahaha!!!
WOW, I'm glad I got out of my VZW contract in June for the Pre. I still ended up paying around $120.
Ditto, I paid very little to switch to Sprint, relative to this new policy!
That is bull shit i think lol 350 for an ETF how the hell can they get away with this BS thats why i will never go over to them because there service cost to much
INSANITY!!!
To all those contemplating the DROID ... beware. :-!
This change starts on the release date of the Pixi on Sprint, coincidence?
No! God, if your out there....
Don't let this happen! The Pixi can't go to Verizon.
The last thing you want is people to leave you in midcontract especially after subsidizing a smartphone so much that they can turn around and resell.
I don't have a problem with an increased ETF.
I don't have a problem with a large ETF -- as long as it goes to zero at a reasonable rate. If one month before the 2 year period is up, a third of your ETF is still present, then there's a problem.
When my wife and I changed so we were on the same cell phone company (when I met her she was on Cingular), we had to pay several months of unused $80/month. Three months before the end of a 2 year contract, it was still $175 to terminate the contract early. (At that time, one day before the contract ended, it would cost $175 to terminate early.) It was also $175 to changer her plan to any cheaper plan.
I understand when someone subsidizes a purchase, they deserve to recoup their subsidy through the monthly service fees, as they expect to. The problem isn't the ETF itself, but its size and how slowly it pro-rates downward.
I find it surprising to find any consumer that would support the ETF practices of the cell companies. Again, not the existence of an early termination fee, but the specific practices and the specific implementation of ETFs by the cell companies.
That is, when ending a contract 3 months early cost more than 3 * the monthly cost, something is wrong.
Sadly there are plenty of sheepple out in the public. They will take and be told to like it. Soo sorry never took that from you VZ years ago never will.
LOL - Sheeple!
--- after the 2 (or whatever)years mandatory contract time frame is up, the recouping should be over and one's monthly rate should drop!
Question:
Are pre-paids Sprint subscribers barred from owning Pres ? Even if a pre-paid Sprint subscriber is willing to buy a Pre paying the full price up-front ?
i would bet they are, because from what i've picked up over time, the sprint activations system simply rejects a pre (or instinct, or hero, or moment) activation on any plan other than the everything data/simply everything plans.
To be pedantic, you're not barred from owning a Pre. You are almost certainly, however, barred from activating a Pre onto a pre-paid account. With the number of network minutes I use a month on my Pre, I understand why this would be the case: The cost on anything other than the Everything Data plan would be prohibitive.
Well it makes since they sub the high end devices so they have to recoup loses in some way..so I cant be mad at them for this, Id asssume other carriers would soon have a varying ETF fee depending on phone model
VZ must be seeing some churn between Sprint and ATT, people stepping out to get a better phone or lower rate.
Supposedly, Verizon is instituting this due to their Buy-One-Get-One offers for PDA phones. People are canceling the contract on the free phone, then selling the free phone on eBay for some good quid. Verizon could just as easily stop offering the BOGO, but they're making money off the new data plans with the freebies (nothing is ever free).
So here's an idea for Sprint. NO ETF! Since it seems like the biggest reason for having an ETF is to recoup the loss of money on subsidized phones the caveat would have to be that you return your phone to Sprint in working condition.
This would make Sprint almost like a "try before you buy" provider. Since it seems like VZW and ATT are going out of their way to lock people in, why not go gangbusters to try and convert those customers who would like to rebel against that tyranny.
Sprint has made huge strides in customer service and in coverage, but for some reason has yet to appeal to those at the other carriers. They need something that will pull these "sheeple" (thanks for the laugh from the earlier poster) into the fold of Sprint.
Wouldn't changing the early termination fee in effect break your contract meaning that you can get out of your contract without paying an early termination fee?
We obviously are purchasing our devices at retail one way or another. cell co's need to make revenue for these devices in some way...that I understand. What I don't get is the fact that simple arithmetic is not used when calculating these fees.
You purchase a device which retails for $440.00 ie. on a two year contract for $200 up front for the device... wouldn't it be only fair to take $10 off of the etf each month, as that cost has already been recouped by the carrier through your plan? These fees should be based on the full retail of the devices. Even on a contract which is terminated early, carriers still make profit on selling a device at full retail, not the wholesale costs they get these devices at. In some cases, current etf's are a bit low.... high in others... given the vast array of devices on the market. Verizon is simply being ridiculous... good thing about contracts is you don't have to sign them!
Just one more reason, among many, to avoid Verizon like the plague.
Anyone here really all that surprised by this?
It seems obvious this move is to keep people from jumping ship to the iPhone. It is their way of stopping the bleeding. Also, they are pushing a new iPhone killer. When people find out that it is not, they will want to leave and get an iPhone. VZ has to stop that train before it leaves the station.
Hmm, not so fast Verizon: http://www.informationweek.com/news/mobility/business/showArticle.jhtml?...
Jonathan, nice post. I wanted to respond by addressing those Verizon subscribers who would be affected by this increase in ETF because they are considering changing to another provider due to a high Verizon plan cost. We tend to think of wireless costs as fixed, but you can tinker with your current Verizon Wireless plan to optimize its features to best suit your usage and often generate significant savings in the process. I know this firsthand because I work in the consumer advocacy division of the company Validas, where we electronically audit and subsequently reduce the average cell bill by 22 percent through our website, http://www.fixmycellbill.com (and I'll add that 22 percent equates to over $450 per year for the average user). Put simply, Validas guards against frivolous and unnecessary charges that over-inflate a cell bill.
You can find out for free if fixmycellbill.com can modify your plan to better suit your individual needs by going to the website. For more info, check out Validas in the media, most recently on Fox News at http://www.myfoxtampabay.com/dpp/consumer/conlaw/lower_cell_phone_bills_... .
Good luck to everyone on retaking control over your wireless expenses.
Dylan
Consumer Advocacy, fixmycellbill.com
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