updated 11:10 am EDT, Wed October 22, 2008
Sprint to lower exit fees
Sprint's Chief Executive Dan Hesse said it will terminate its early cancellation fees to customers as soon as December in a move that is in-line with rival companies, says a Tuesday report. The fees will be lowered from the current minimum of $200 when subscribers leave Sprint before their two-year contracts end once Sprint's billing software is updated, the company announced, though the amount of the new charge was not disclosed. The fee would be reduced according to how many months are left on a user's contract, mirroring the prorating moves from competitors such as AT&T, Verizon and T-Mobile.
The move isn't all selfless, however, as a California judge's ruling earlier this summer had some part in it, ordering Sprint to reimburse customers more than $73 million, stating the fees violated state law. The FCC is also preparing a plan to force wireless carriers to prorate their early exit fees.
The wireless providers maintain that the fees exist to help them recover the cost of the handsets, which are subsidized by the companies through long-term contracts, as well as to offset the costs of signing up new customers. By contrast, customer groups believe the fees are in place to discourage subscribers from finding better value at competing companies.