Graph: Which Cellphone Company Has The Best Early Termination Fee Policy?

Discounting or pro-rating the early termination fees that cellphone companies love to tack on to their contracts is becoming more common, so we thought we’d make some graphs that show the strengths and weaknesses of the different policies. As you can see, T-Mobile 2-year ETF doesn’t make any discounts until fairly late in the contract period — and their ETF of $200 is higher than either of the other two companies that offer discounts. (Sprint does not pro-rate or discount its ETF.) T-Mobile’s ETF does, however, reach a point where their discounts are steeper than Verizon and AT&T’s pro-rating.

As far as the other policies go: AT&T and Verizon have similar pro-rating plans, (for each month that goes by they deduct $5 from the ETF) but Verizon starts discounting earlier than AT&T, according to Consumer Reports.

When you look at 1 year contracts, T-Mobile’s plan looks a lot better. Their discounts beat both AT&T and Verizon after 6 months. Also, if you cancel T-Mobile in the final month of either a 2 year or a 1 year contract, you’ll have to pay either $50 or your monthly fee — whichever is less.

Something to watch out for: T-Mobile’s trial period is only 20 days, while AT&T and Verizon both give you 30 days.

T-Mobile announces pro-rating of termination fees [Consumer Reports]

Comments

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  1. acknight says:

    Don’t they all go to zero after the 24th month? Or do any of these actually have contract terms longer than that?

  2. flugelhorn says:

    @acknight: I’ve never heard of a cell phone contract longer than two years.

  3. Ben Popken says:

    @acknight: For the time being, all 2-year contracts end after the 24th month, though I’m sure the cellphone industry is working hard to rectify that.

  4. evslin says:

    @acknight: Yeah, that’s why it doesn’t matter that T-Mobile’s is lower at the end. By the time it matters your contract is almost up anyway, and in the meantime theirs is a lot higher than the others.

  5. What about the other cell companies, like sprint?

  6. Bladefist says:

    @Ben Popken: I think they should be able to brand you for life. I want Verizon – Can you hear me now branded into my back.

  7. mgy says:

    @EE: No one has ever made it through a Sprint contract alive. Therefore, no data.

  8. milk says:

    Sprint’s is $200.

  9. ohiomensch says:

    @flugelhorn:

    I added a third phone to my t-mobile family plan, the sales guy put it in as a 3 year contract. I disputed it with t-mobile and they knocked it down to a 2 year.

    Also with t-mobile, the ETF is PER PHONE. I have 3 phones, if I want to cancel, its $600.

  10. Xerloq says:

    Do all cell phone companies offer standard service (e.g. not pay as you go, but a regular plan) without a contract? I brought my GSM cell to Cingular back in the day and got one w/o contract.

  11. ryatziv says:

    The slopes are wrong. Other than the shallow slopes for ATT and Verizon, everything else should be an infinite (vertical) slope.

  12. Truthie says:

    Well if we’re looking at this mathematically, the area under the curve (representing the total potential ETF exposure over time, if you will) is much lower for AT&T/Verizon than for T-Mo, so I would say that T-Mo’s is worse even if it’s a little lower at the end.

  13. can you beer me now?

  14. fluiddruid says:

    I’m really hoping Sprint will get on the trolley here. I’m not planning to leave Sprint (due to a sweet sweet employee discount from a company I don’t work for, which I’m too afraid to lose), but it makes me very concerned about getting a new phone.

  15. @EE: Spring and AT&T are the same now, aren’t they? I would think that the ETF thing would’ve merged too.

  16. DeadWriter says:

    A key factor in my next contract will be which telecom treats me least like a criminal, especially when I have been or will be a loyal long term customer.

    My way of voicing my displeasure with T-Mobile’s ETF is going to be by leaving them at contracts end.

  17. othersomethings says:

    I just spoke with an AT&T rep two weeks ago, and was told that their ETF was $150 per phone with no pro-rating. (I have 4 months left in a 24 month contract.)

    Was I lied to, or does it vary by contract? does anyone know?

    • RandaPanda says:

      @othersomethings:

      No, you weren’t lied to. The representative just didn’t explain the qualifications for getting the prorated ETF.

      The prorating of the ETF is only for new contracts after May 25, 2008. Any contract that was signed before that date is still the same ETF of $150 (odd, usually it’s $175) with no prorating, until your contract ends.

      Now, once your contract ends, if you decide that you’re going to sign a new 2 year agreement with AT&T, that’s when your ETF will start prorating. :-)

  18. I gotta ask. What is the attraction with wanting to terminate your cell phone contract?

    Yes, I understand the 1%…. the person that moves out of a service area, dies, gets married and can drop a line, the free phone benefit with your promotion at work etc etc.

    The 1% are the exception.

    So now explain the other 99%?

  19. Pro-Pain says:

    My Sprint contract expires July 1st and I’m so excited to get away from them finally. We just got Cricket wireless here and they are $45 a month for unlimited everything with no contract. I’m still wondering what the catch is there…

  20. consumersaur says:

    @Corporate-Shill: Or terminating a relationship with a bank, cable company, gas station, pharmacy, retailer, grocery store, lawn care business, ISP, etc…

  21. Pro-Pain says:

    @Corporate-Shill: Obviously, you don’t own a cellular phone. Or, do not have Sprint service.

  22. KarmaChameleon says:

    @Corporate-Shill: Well, in my case I may be forced to terminate my contract because I’m getting the new iPhone and already got a subsidy for my current AT&T phone (which I bought when they were still Cingular a little over a year ago). But I’m still confused on that.

  23. JoeTan says:

    people still can’t get a grasp on the whole CELL PHONE thing eh?

    Just get a phone and be done with it already.

    As for Sprint, I’m with them like 8 years or more with no problems. Still have the same phone from 5 years ago. F the camera phone, F the music/games/internet. About as cool as when 8th graders carried pagers like they were expecting a call from El Presidente at any moment…

    Nope just ya mama again.

  24. snoop-blog says:

    @JoeTan: I miss the pager.

    I loved the way they could clip into your pocket and you could still see the screen. Plus those chains? PIMP! I have had this idea to cross a flip phone with a pager design. You know how pagers had a spot to slid in a clip on the back if you wanted? I want my flip phone to have that. and put a screen on the top of the phone so the small screen would be facing up when in your pocket.

  25. @Pro-Pain:

    MY first cell phone contract was from 1986.

    My second cell phone contract was from 1991.

    I am on my 3rd cell phone & contract, the current one is from 2005.

    I guess I am too stuck in the mud to understand the need to change cell phones like I change my socks.

  26. snoop-blog says:

    Man I tried to find a pic of the way I use to wear my pager but couldn’t. Basically the clip part would be outside my pocket, and the pager part inside so the screen on the top is facing up. That is how I want to wear my phone, with a screen facing up for caller id. I bet that phone would sell like hot cakes.

  27. @snoop-blog:

    Darn, you had one of those nice pagers. Yep, that visible display sure was great.

  28. snoop-blog says:

    we use to be able to clip a pager anywhere, why haven’t phone caught on to the whole, I don’t want to wear it on my belt like I’m freakin batman, but yet don’t want to dig to the bottom of my pocket either. Build a clip like the classic pagers had. You could remove the clip for those who didn’t like them, but it was a strong sturdy clip. Not like those stick on swivel ones that require you to look like a tool, or like you have on a utility belt.

  29. sean77 says:

    No Alltel?

  30. unleashed says:

    Those are some pretty nice cheap termination fees. Rogers rapes us here with a nice $400 cancellation fee.

  31. thewriteguy says:

    @Corporate-Shill:

    Is your cellphone one of those old rotary dial ones?

  32. Sidecutter says:

    Sprint doesn’t pro-rate ETFs, but you can change plans and optional add-ons at any time without penalty, as long as you maintain service for 2 years. You can even drop your account into a quarterly status that costs about $6 a month and just let it molder if you like.

  33. I don’t mind the contracts, honestly – what I hate is that Verizon will RESTART your contract for changing your plan, even if you are upping it to a higher one! Fudder Muckers!

  34. jr2k says:

    @verucalise: I have never had my contract restart with changing anything from Verizon. Depending on how much I text, I have been changing my texting plan and minutes plan almost every month without a change in my contract date.

    In fact, I am in charge of buying everyone in the office 3g Iphones for work and checked with both corporate and consumer offices and VZW will let me drop my personal phone to the bare minimum(no txting, 450? minutes) until my contract is out.

    I hate verizon in almost every way (locking down gps, bluetooth), but I have to defend them on your point.

  35. @thewriteguy:

    Cute Question.

    Nope.

  36. Rob C says:

    What I laugh at is in canada, almost every contract here is a three year rape pack. Of course we have a “System access fee” which will bring even the cheapest $20 a month plan to $35 or more! Oh yeah, and you get a sweet, thin phone for free! But they forget to tell you that if you don’t manage to step on the thing by two years in…the battery will be gone anyways.

    There you go, you then have a choice, pay the absolutely ridiculous $400 termination fee…or pay $300 for the same phone that’s now 2 years old… Pick one.

  37. ottawa_guy says:

    Yep Bell Canada here rapes you as well… $400 cancellation fee, system access fee and $60 a month for 30MB of data usage.

    I wish I could cancel but no way in hell am I paying $400 plus one months regular usage (yeah you have to pay for an extra 30 days, it’s in their TOS)

  38. teqjack says:

    Heck, I can beat all those – because all I want is to be able to make and receive calls. There are several companies out ther: mine –

    [www.consumercellular.com]

    has a no-cost one-month termination. And if you don’t mind last year’s models, the phone is free! $15/month, but calls are (a small amount) extra (I make VERY few calls and don’t even bother buying time at discount, your mileage may vary).

    Oh, and while I don’t use it (not with MY eyesight, kids) it does connect to the web…

  39. Weezy F Baby says:

    @Pro-Pain: i’ve been made aware of two catches when dealing with Cricket, but these were both from Sprint employees, so you’re going to want to do some additional research.

    1. Instead of renting “space” from existing cell phone towers, as the major companies do, apparently cricket is establishing their own network, so at this point, its pretty limited.

    2. ROAMING FEES FOR OUTSIDE YOUR HOMETOWN?!?!

  40. brandymb says:

    I buy my unlocked GSM phones on ebay. Fuck contracts.

  41. ohwevad says:

    Sweet, I love looking at text in jpegs.

  42. americandanger says:

    T-mobile’s grace period is 14 days… not 20.

  43. Hmm… My comment must not have posted, but if you really want to work the system, then T-Mobile never drops below the other carriers because 2 months before your contract ends you can upgrade and then cancel within the grace period. It’s kind of a way of using their own little technicalities that the companies use to screw you over back on them to screw them over.