AT&T nearly doubles iPhone early termination pain
The dirty little secret of many of the “new, never used” iPhones for sale on eBay and Craigslist, as well as gray market units sold overseas, is that they were purchased legally on contract. There is a $100+ margin between the iPhone’s $199 retail price + $175 termination fee, and what it can be sold for.
ComputerWorld reports that AT&T is nearly doubling smartphone contract early termination fees from $175 to $325. The change will be implemented on June 1.
“Phones are expensive,” said Jeff Kagan, an independent telecommunications analyst. “In many countries without early termination fees, the customers are required to pay the full $500 or more for a phone. In the United States, [carriers] started subsidizing and continue doing it today. When a carrier helps a customer buy a phone by giving them a loan of sorts, the customer agrees to repay that loan.”
Some speculate AT&T is increasing termination fees in order to stave off a wave of defections related to the iPhone Verizon, which some analysts say could be just around the corner. Another possibility is subsidized iPhone prices, the amount consumers pay, will be going down and Ma Bell needs to make up the difference — all so much idle speculation.
Wanton speculation (with eggrolls)…
Of course, there’s also the issue of gray market smartphones alluded to in the lead, which may or may not exist let alone be a consideration in AT&T’s termination fee machinations. Whatever the case, fees are going up.
However, it’s not all bad news for AT&T customers, the carrier said in an open letter to customers that it will drop early termination fees for new and renewing customers who use basic and quick messaging phones by $25 to $150 — I guess this style of handset isn’t selling like it used to.
Are you dying for a Verizon iPhone and ready to dump AT&T at your earliest possible convenience?
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