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Verizon upping cancel fees for smartphone owners

updated 12:45 pm EST, Wed November 4, 2009

Verizon to double ETFs for smartphones

Wireless provider Verizon is poised to double its Early Termination Fee (ETF) for contracts associated with smartphone devices. Leaked documents show that it will now cost $350 instead of $175 starting on November 15th if subscribers end their contracts immediately, although each month of the contract served will decrease that fee by $10. While it is not known which devices this new higher fee will apply to, it is likely to be all smartphones offered by Verizon, including BlackBerries and the upcoming Android-powered Droid from Motorola.

Verizon is suspected of introducing the higher ETF to keep subscribers from profiteering by selling their subsidized smartphones to other individuals. It also helps guarantee that these more lucrative customers stay on their contracts and generate profit before they leave the service. [via BGR]






By Electronista Staff
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Comments

  1. imagine engine

    Fresh-Faced Recruit

    Joined: Aug 2007

    0

    Comparison to other carriers

    Americans may find Verizon ETF increase to $350.00 to be outrageous but to Canadians such as myself it's expected. If the smartphone cost the carrier $600.00 to $900.00 to buy from the manufacturer and the customer only pays a small fraction of that at time of purchase then the ETF (we call it ECF here in Canada) should offset the cost the carrier paid. I have family living in the USA and even they are surprised how low the ETF is considering what they pay up front to the carrier on a 2 year term to get a smartphone. Keep in mind here in Canada it's the norm for carriers such as Rogers, Fido, Bell and Telus to ask for 3 year term agreements on subsidized hardware. Example here in Canada the iPhone 3GS 32 GB is $299.00 on a 3 year voice and data plan with minimum $45.00 MSF (Monthly Service Fee). The ECF for smartphones with Rogers and Fido is capped at $500.00 but with Telus they have no cap as outlined in their current terms and conditions (ie: 3 year term with Telus could cost the customer $720.00 ECF). The customer has the option to buy the smartphone at full price with out term commitment (ie: Rogers iPhone 3GS 32 GB $780.00) but most consumers opt to go on term agreements as they can't afford the high cost of buying a smartphone on no term. Those that complain about Verizon's ETF increase have no concept of what it cost to buy smartphones when not subsidized.

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