ATT Begins Reducing ETF Charges Month By Month

AT&T has started having early termination fees go down each month for new contracts (old customers are still screwed). The $175 fee for canceling AT&T service before the end of your two-year contract will go down $5 every month. This means that even by month 23 out of the total 24 you will still pay a $60 fee. While the other providers have announced their intention to do the same, Verizon and AT&T are the only companies to actually have ETFs go down over the course of the contract. This should not be confused with “pro-rating,” however, as the fee is not being divided proportionally. If it was, the fee would go down $7.30 each month and by month 23 you would only pay a $7.30 penalty.

AT&T Launches Pro-Rated ETF System [Broadband Reports]
(Photo: mrbill)

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  1. Anks329 says:

    This only applies for new contracts signed now. If you are a current customer, your ETF will not pro-rate.

  2. tedyc03 says:

    When are these companies going to stop acting like cell phones are a luxury and start offering customers contract-less phones that don’t cost $8 a minute?

  3. parliboy says:

    When people stop buying contract-less phones that cost $8 a minute.

  4. jamar0303 says:

    @tedyc03: Only when customers demand it. Here in China prepaid costs about the same as postpaid and is the de-facto contractless service. Any packages/services you can get on postpaid you can get on prepaid for approximately the same money; charges are deducted every month and you can get an e-bill.

    Little fact- If I go prepaid on AT&T my internet will cost as much ($7-8 per MB roaming in vs about… $10/MB on AT&T GoPhone prepaid) as if I roamed in with my China Mobile SIM. Says a lot, doesn’t it…

  5. azntg says:

    Yay, good to see that I’m still part of the screwed party.

    No matter, contract ends in 2 months anyway.

  6. When are customers going to stop demanding fancy-pants phones that require a 2-year contract to subsidize?

    Give me an LCD screen with no frills, and let me sign a 6-month contract instead (or let me actually BUY the phone for $100 and sign NO contract). In 2000 when I got my first cell, 1-year contracts were the norm. Now I can’t find much under 2 years.

    All of this is driven by revenue stream planning, and it ALL comes back to our “need” to get $500 telephones for $99 or less. The ETF and the monthly fees are just part of the equipment subsidy.

  7. dragonfire81 says:

    Now we wait and see how long it takes until Sprint starts prorating ETFs.

  8. jamar0303 says:

    @Ash78: So why is *everyone* forced under a contract, even if they only get a SIM? I, for one, want to buy my own $500 phone unsubsidized, yet would still be forced into a contract with just a SIM. In China, I can do this. In America, it seems that I can’t (no good options).

  9. kathyl says:

    @Ash78: I really think they used to do this. I could swear that I walked into the retail store for my provider (Verizon) about five years ago and there were three prices for the phones that were displayed. One was with no contract extension, there was a slightly lower price if you bought with a one year extension, and a much lower price if you took the two year extension.

    I tend to keep phones for a long time, and we’ve only gotten new phones once since then (through a company plan, so that was a different deal and I didn’t get a chance to see how the new phone purchasing process has/hasn’t changed) so I have no idea if that’s still a thing that they do or if it’s just, “Hey, you want a new phone? Guess you’ll be with us for two years, then.”

    I would absolutely pay for a lesser-frilled phone rather than lock myself into a longer contract. I don’t personally want, use, or need the phones that do a million things other than letting you dial a number and make a call, and I can’t see why people who just want a phone that’s a…you know, phone…should be stuck with these long contracts that supposedly subsidize the cost of the phone.

  10. @jamar0303: I wish I knew. Probably because 99% of customers buy the phone and they have no way to price a SIM for you without contract. It’s absolutely ridiculous.

    The entire rest of the world has more reasonable cellular policies/systems than the US. C’est la vie. Probably because our landline infrastructure is (was) so thorough, while emerging markets can leap right into cellular without the hassles of landline providers hindering legislation and advancement…

  11. Parting says:

    @Ash78: In USA, phones are a lot cheaper than in Europe, since they are subsidized by long contracts.

    Too many people want something for nothing, so inevitable happens and companies raise prices.

    I speak from personal experience, since I worked for some time with a wireless carrier as sales rep. I’ve seen a lot of customers screaming at me ”Why it’s not free? (700$ PDA)” and ”I want a plan all unlimited for under 20$”. I would say, they represent 1/3 wireless customers and they screw it for all of us. They don’t want to pay anything, and if they were offered 5 year contact, they would take it just to get a ”free” phone with all bells and whistles.

  12. Parting says:

    @jamar0303: Can’t you just buy a prepaid SIM and then call to transfer to a monthly plan?

  13. firesign says:

    @Ash78: because, believe it or not, there are people (like me) who need more than a basic phone. i actually need a smartphone with a data plan.

  14. @Victo: Yep, Americans are notoriously cheap when it comes to “fixed costs” (or capital expense). We are a nation of payment-makers, it seems.

    I’d much rather pay a fair price for a phone–or at least have the CHOICE, as several people noted–and then have a much lower monthly expense. In turn, such phones (eg in Europe) can then be sold to other people later on. Here, most cell phones are paperweights when you leave the network. I’m not saying GSM is better, since the US is a huge country, but I’d just like to see more portability.

  15. @firesign: i actually need a smartphone with a data plan

    Does your job require it? Will they pay for it? Business users are a completely different segment and price sensitivity, just like airlines or computers, etc.

    I was speaking only for regular consumers, the vast majority of which don’t need any mobile web (but will go ahead and take it, since it’s rolled into a handy monthly fee)

  16. jamar0303 says:

    @Victo: And I’ll be month-to-month? I’ve asked around for AT&T and was told that it was not possible or that I’d have to sign up for a contract (two different stores).

    And as for subsidies- in China, at least, when you do a 2-year contract your subsidy grows with your plan size. If you talk a lot, you get a better phone for free.
    And on a short trip to Japan, I discovered that their subsidies are even better. That $700 phone *is* free. You get a 50% discount on your monthly fees for signing up a 2-year contract. Things like that that make me wonder just how much money American cell carriers make.

  17. induscreed says:

    Sign up for a 1 year contract with AT&T, once you are done buy phones at full rpice from ebay, craigslist or when you travel to Asia.

    Thats what I have been doing since the last 5 years and its worked well for me. IMHO Between At&T and tmobile I think AT&T has better service, oh and if you plan on changing handsets every few months GSM is the only way to go.

  18. My cell phone is the entry level model from 3 years ago which I had to buy because 7 year old phone had just died.

    I am on the $9.95 per month el cheapo rate.

    Seems more than adaquate for my needs.

  19. Serpephone says:

    Back in the old days of Cingular, contract ETF’s WERE pro-rated–and the max was $150 on a two year contract!

  20. Buran says:

    @jamar0303: We *ARE* demanding it. They’re refusing to provide it. And people are still bending over because phones are not a luxury item but are being treated as such by the cell companies.

    There is no reason they can’t give everyone the pro-rating given they wrote into their own contracts that they can change the contract terms at any time. Funny how the contract doesn’t change when it would benefit the customer, huh?

  21. jamar0303 says:

    @Buran: This is why I’m afraid to sign on to a provider when I come to the States. The carriers keep pushing prices up and up, keep pulling crap on customers, and I think I’ll keep my Chinese phone number. Roaming costs haven’t changed in years, I didn’t sign a contract, and I get better customer service. Like I said, data is already cheaper roaming than local prepaid, and same with texting. As long as I don’t talk, it’s cheaper and better (I get coverage from AT&T and T-Mobile) for me to roam.

  22. IndyJaws says:

    @dragonfire81: I called last week to see if they were doing it yet. I have only 2 months left on my contract, but want to pick up a JesusPhone when the new ones are released in a couple of weeks. No matter how hard I pushed, they refused to budge an inch. They’re completely within their rights to do so, but they’ve lost in the long run. I’ve been with them for 11 years and have another 3 phones with them. Now, instead of losing just one phone, they’ll have lost 4. Short-sighted thinking FTL.