AT&T Changing ETF Policy as of June 1st
Looks like AT&T is making some changes to their ETF Policy as of June 1st, 2010, including raising iPhone (and all smartphone) early termination fees from $175 to $325. After that, every month you keep service with AT&T, the ETF will continue to drop $10 each month.
For basic phones and messaging phones, the ETF will drop a bit, from $175 to $150. After that, every month you keep service with AT&T, the ETF will continue to drop $4 each month.
That's great for regular phone users, but it's quite the opposite for our readers. When asked if this had anything to do with iPhone exclusivity, AT&T spokesman Mark Siegel had this to say,
"..The idea is, and we think that it's fair approach, that if you spend less on a device, your early termination fee should be less," he said. "If you spend more, your early termination fee should be more. ... This move, what we did today, is unrelated to any device announcement or future plans..."
Hmmm, sounds kind of sketchy to me. There's been rumors flying around about the iPhone's exclusivity running out for a while now. With the iPhone HD/4th Gen probably right around the corner, if the Verizon iPhone in the Fall rumors hold any truth at all, it would make it pretty expensive to abandon AT&T. Or could it have something to do with stopping all the unlockers and iPhones that flood eBay after release for people looking to make a profit? Or hey, maybe AT&T's telling the truth, and it really doesn't have anything to do with the iPhone.
What are your thoughts?
[via Dallas News, AT&T]
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I would say exclusivity is ending and the Verizon iPhone is coming soon.
I'm guessing AT&T lost money on the release of the 3Gs early adopters who had not completed their 3G contracts and decided to prevent a similar mad rush when the iPhoneHD/4G comes out.
I think they would rather get 3G owners to re-up their contract with the new phone than take a bath allowing early termination for 3Gs users.
This is pretty much what Verizon did, so its not out of line.
They're losing exclusivity, so they want to make sure iPhone customers stick with them!
And BrianAnus, yes I do! Thanks for clarifying it!
Verizon ETF is the same...I think it does have something to do with exclusivity...AT&T said earlier this week that they aren't worried about the verizon iPhone because most of their customers are tied in by contract...now if customers r going to leave then AT&T would make a sh*t load of money from ETF..
I have a question...if they're changing the ETF...that's considered amending the contract...then can current customers break their contracts?
No big deal to me. Don't plan on leaving.
I dont think it has anything to do about sales with the 3G or even the 4G/HD coming out...verizon did the same thing and they got nothin special..lol..
Can they change the terms of a contract already signed in the middle of it like that? And if so don't we have the option to break it within 30 days?
@Leo ETF will be changed for people who re-sign after June 1 I believe. Also this doesn't affect people re-upping early for a new phone because they aren't terminating their contract.
Same as VZW, just as lame.
I paid my contract off early 3 months ago, 150.00 - that's 2 months of service for which I was only using Data, Now my Iphone is on WiFi only - waiting for the new 3g data cards to be released, same plan as the iPad, 15/30 data only, no contract Suppose to come out in June,
If you don't want to get stuck with a high ETF, pay it off now and go month to month until other options come along
TAKE THAT Verizon iPhone DEFECTORS!! Or maybe it's just a coincidence...? Doubt it. Nothing in BUSINESS IS A COINCIDENCE!
This only affects those who sign a contract AFTER June 1st not current customers.
@icebike I don't think it has anything to do with iPhone current customers at all. AT&T locking them in for longer by letting them upgrade early does nothing but benefit them fiscally.
Ok, it stays the same for existing customers, this makes sprint and that evo 4g look better and better, I just don't know if I could let go of my iphone, it's like they gave us the crack for free for a min and now here comes the hammer
Well if you upgrade early there is still some financial penalty is there not? And it is based on some percent of your remaining contract.
If you just got a 3Gs, this time last year ATT is still paying that off, and now you want another phone that they have to pay off.
What was the drill last year? People upgrading to 3GS must have paid something if their 3G wasn't paid off, No?
@icebike no per say "penalty" but if you weren't eligible fir the full discount, you paid a $200 upgrade fee. My line is eligible every 12 mos regardless because my bill is so high. AT&T in no way loses money. They only changed the eligibility for 3GS customers that were within 2 mos of the launch date or something like that. AT&T makes their money off the plans not the devices. Believe me, keeping iPhone users is much more financially beneficial to them than most realize. Even if they make upgrade exceptions, they're making it back in data fees very quickly. The want to retain customers. An ETF is one time, a monthly bill is steady income. They know what they're doing. And it's not doing customers a favor, it's making their pockets deeper.
4gen iPhone. It's so not as many people terminate their plans to upgrade.
scared of the evo
Best. Picture. Ever. America needs to hire Rickson to choke out all of these crappy executives that provide horrible services.
They are just bringing their ETF in line with Verizon. And if you don't want to pay it don't cancel your contract early.
While I feel the ETF should be a prorated amount based on the retail of the phone the carrier subsidizes plus a reasonable interest, I would be worried that for iPhone HD 64GB, that might actually be more than the ETF stated.
I do hope the FTC looks into this and regulates it to based on the device. That would be fair to customers and
If anything, I was planning to terminate my contract with AT&T if they didn't move up my early upgrade eligibility. It would have been cheaper than paying $200 extra.
All you people who are saying this has something to do with upgrading to the new iPhone are clueless. You won't be terminating just extending. This has only implications on people who sign a new contract after June 1 then switch carriers. This will prevent people getting the 4th gen iPhone next month and then heading to Verizon in September if they get the iPhone then.
Everything AT&T does has to do with the iPhone. This is no different. But I don't think exclusivity will end this year. Maybe next year. But I don't think we'll see a Verizon iPhone this side of LTE, personally.
And for those of us in Canada - if for some reason you're on AT&T, you must approve this change. If you do not, you can decline their changes and say "FU" to the contract. Good ol' Canadian law, protecting us consumers..
Works for Rogers, Bell, Canada, Fido, Wind Canada, and any other Canadian company. If they modify your contract, you have 30 days from modification to accept the changes. If you do not contact them, they assume you agree, and your contract withstands, however if you call and decline the changes, your old contact is null and void and you get out of the contract without having to pay your ETF.
So I am a sprint customer and was thinking of getting the iPhone HD. I am thinking it would be better to go in May 31 and get a 3G and use it for the 2 week return window. I could swap it for the HD if it comes out before 6/13 and then have an old contract with the lower term fee. ???? Or just return it if the HD doesn't come out in time.
thoughts?
So I am a sprint customer and was thinking of getting the iPhone HD. I am thinking it would be better to go in May 31 and get a 3G and use it for the 2 week return window. I could swap it for the HD if it comes out before 6/13 and then have an old contract with the lower term fee. ???? Or just return it if the HD doesn't come out in time. Thoughts?
This has nothing about exclusivity. When VzW changed their ETF to what it is now they basically created an industry standard. Their argument that a higher ETF is needed to recoup cost created a window for other carriers to follow. The reason Att didn't do it then was due to VzW's changes were on shacky grounds and people were aware and unhappy with it.
SINCE instead of hurting their business VzW users didn't care and basically took the ETF without a whimper the consumer legitimized the ETF and gave another reason why carriers can shift towards this retarded ETF. By the end of 2010 we should see most carriers adopt this ETF.
In plain english, anybody who renews a contract or signs a new contract after June 1, will have the new ETF. So when does the new iPhone arrive? Yes after June 1.
@ homie
i don't think the G4 iPhone will be out by then
@homie
So far, the iPhone 3G and 3Gs have both launched in early July, and the next one will almost certainly be the same. ATT is smart enough to prevent you from doing just that (not that I approve but that is a sound business decision to make).
I don't get it ATT network has a million dropped calls, there network needs to upgrade!!! They don't want to spend the money however they want to screw us with higher ETF? WTF!
It very simple they don't want people that got 3GS to leaving in about a year when they lose Exclusivity...
ive had one dropped call in the last 8 months of service. i must just be lucky
I think you need to clarify. If you are already under contract, your ETF fee will stay the same. If you get a new iPhone 4/HD your fee will increase. They are definately doing this to trap early adopters from bailing to Verizon a few months later. Thank heaven we will all be free from AT&T soon!
Sounds like they need more money. Buy the device now and cancel contract is probably still cheaper than purchasing full price. So they have to make up for it. The trick to this is to have a aditional line of service where they are eligable to upgrade every two years but don't start the line at the sametime. Have them a year apart though. So you can upgrade every year without paying any of this crap to upgrade. 9.99$ a month line can be used by somebody your dating or cousin, etc.
I can see @llofte's head exploding as more people mention the word "Verizon" in the same sentence as "iPhone".
Seriously, what do you expect? The smartphone providers pay more, they should have to pay more to terminate a contract. If you're using a dumbphone and you don't need a smartphone, no problem, your ETF isn't as high. I'm fine with this.
Seems like a lot of money. When I've ended a contract early in the UK you just pay your remaining line rental for the months you would have been there - six months left at £25 a month £150, bye bye...etc etc. That seems fair. Ho hum.
Wow, this totoally screws me. I already have on order a droid incredile but it won't get here until the 5th, and I was planning on tranferring my number then. I was only looking at a penalty of about $105 (due to $5 off for every month of service) and since Big Red has awesome service here, it was going to be a sweet move. Looks like AT&T and their cash gouging tactics are forcing my hand here.
Wish I had read further. Looks like I'll be leaving anyway.
That globe is on the wrong guy.
The globe is on the wrong guy.
k guys i know this sounnd stupid but come on...if the iphone come out for version the only good thing i will be abel to witch to METRO PCS... i know metro sucks .... but metro pcs is really good in Miami Fl..... in the other hand version sucks in here.... n ATT is the best thing... not if u want to same money in ur att bills.... start using google voice...
I know it's very easy to rio on AT&T but they have every right to up their ETF cost. They pay nearly $600 for an iPhone and even with this new ETF they still won't recoup all their money if a customer cancels a contract right away. As long as consumers want heavily subsidized devices they're going to have to deal with raising ETF costs.
I am currently with Verizon but am switching over to get an iPhone. Would this work to avoid the higher ETF? Buy the 3GS on May 31 while the ETF is still $175. Then assuming iPhone 4 is out before the end of June, return the 3GS within the 30-day trial and get the iPhone 4 still with the $175 ETF since you signed up before June 1. Thoughts?
Krypto74, this is only for new signups. Your ETF will be as you had expected.
I think if you were to do that, do it now and not wait until the 31st. Don't leave it up to some AT&T store employee to get your contract to the big machine for you.
I canceled mine in March and went with Sprint until the new iPhone comes out, that Apple wants to keep secret, that we already know about. It's just funny that they raise the ETF so close to the date of the WWDC. Oh how companies bet around the question, I mean bush.
their changing it because at&T is going to have iphone in june and likely we will see a Verizon phone in September or holiday season. They are going to see serious people moving to Verizon and they are trying to discourage people from leaving for Verizon.
That's they're excuse? How lame. Verizon's reason was because they always do a "Buy one smartphone, get one free" promotions (a promotion they seem to run all the time) and people would get the second phone for free and cancel that line and sell the phone for at least a $300 profit.
Because of the Evo with that huge screen I want!! I love my 3GS 32GB and get great 3G service. Not eligable for upgrade till november. I'm dissapointed that the iPhone hd won't have a larger screen than what I have. It's all about having the biggest screen to me then features second. Thinking of taking the loss and getting a evo...
Be clear this ETF of $325.00 is only for the iPhone. Other phones that were 175.00 are dropped to 150.00. I am sure this is so people will no jump ship as more rumors of iPhones showing up on other carriers.
@Memphis
you are very incorrect. The 325 ETF is for ALL smartphones. Not just the iPhone.
@allyson Kazmucha You are correct. I just did not want people to think that all phones from att were 325.00
This is directly from ATT webpage http://www.att.com/gen/press-room?pid=17951
"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."