T-Mobile introduces declining early termination fees

From a press release issued by T-Mobile:

Beginning on June 28, 2008, the ETF for customers who choose a one-year or two-year service agreement with T-Mobile will decline during the course their contract. The ETF decreases from $200 to $100 if customers terminate service with 91 to 180 days remaining on their agreement; and decreases again to $50 with fewer than 91 days remaining. If customers terminate in the last 30 days of their term, the ETF is $50 or their standard monthly charge, whichever is less.

Here’s a quick pic:

tmobileetfschedule.png

Not terribly appetizing, though I guess the point is more about staving off regulatory legislation than pleasing customers. Hated Sprint-Nextel is now the only remaining ETF holdout; understandable, given that fleeing customers are its only growing source of revenue.

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Rob Beschizza is the Managing Editor of Boing Boing. He's @beschizza on Twitter and can be found on Facebook too. Try your luck at besc...@gmail.com

 

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9 Responses to T-Mobile introduces declining early termination fees

  1. stratosfyr says:

    I rather despise what ever it is that’s broken in the psyche of consumers in the United States

    It’s the same here in Canada. They’re always trying to convince you to rent, or buy “extended service plans.” They say it’s for peace of mind. Basically if anything goes wrong, they fix it, no questions asked (in theory).

    The problem is it’s almost never cost-effective. For example: I bought a modem from my ISP. I paid, I think, $80 for it. They offered to rent it to me, for about $5 a month. Not a lot. Up front, $5 sounds like less– and hey, it’s just on top of the bill you’re paying anyway. What’s $5? But I bought it in 2003 and it finally broke due to a lightning strike (a fairly unlikely occurrence) last week. If I’d rented it, it would have cost me $300 instead of $80.

    I just calculated the new cell phone I want ($300) would be paid for in 12 months if I bought it upfront and went prepaid instead of going on a plan, if I added a data package. If I don’t add the package, it’ll be paid off in 9 months. Many people use more airtime than I do, so that’s a factor, but I bet a lot of them spend more than they have to.

    Best Buy offered me a >$300 service plan for my $1200 laptop. (25%?!) I almost laughed in their faces. What do you know? No dead pixels two years later. I own my furnace, my water heater, my telephone (and answering machine! no voice mail for me, no sir), my cable box — these are all things you can rent.

    I almost cry when I see people falling for it. I see why they do, though. Who has $300 or $600 just lying around? It’s so much easier to justify a couple of extra bucks a month. What is that, a few cups of coffee? Who wants to deal with a broken laptop — it’d hurt to drop another thousand to replace it. Never mind the odds that it’ll break, or that if you buy 4 big-ticket items you could afford a 5th with the money. Or a mortgage payment.

    It adds up fast.

  2. PatGund says:

    A note about Sprint. I made the mistake of renewing my contract with them in March of 2006. I tried to cancel it last March to find out they changed it and renewed it in December of 2006.

    So we’re now having a fight where they’re trying to charge me a cancelation fee and I’m saying “No, not a chance”

    Sprint doesn’t have ex-customers, they have enemies

  3. Antinous says:

    Sprint contracts are all two years. I just discovered that I still have ten months left on mine. This perplexes me because the Statute of Frauds limits personal service contracts to one year. Any lawyers listening who can explain this?

  4. Alan says:

    Lucky me; I’m a dissatisfied Sprint customer with 2 months left on my contract. Then again, I really wouldn’t want to give them $50 for nothing just so I can go contract with someone else who is only marginally better.

  5. zuzu says:

    So, how does that whole mobile phone contract trading option work, again?

  6. Ryan Waddell says:

    I rather despise what ever it is that’s broken in the psyche of consumers in the United States that they couldn’t grasp or otherwise refused the European model, which makes so much more sense

    In Ireland, my RAZR was locked to the Vodafone Network. AND I paid 300 euro for it, without a contract, so it’s not like it was subsidized (the Canadian subsidized price on the RAZR at the time was $100). I had to find software online to unlock it and use it here in Canada when I moved back home.

    You also have to pay a television licence fee in Ireland (and I believe the UK), simply for owning a television. Every single year. So yes, parts of Europe might be doing it right… but at least in Ireland, they certainly aren’t.

  7. themindfantastic says:

    Seems similar to the ‘tab’ concept of Koodo phones here in Canada. You get a running ‘tab’ of I think $125, to spend on a phone if its cheaper than $125, you pay nothing for the phone, and every time you pay a bill they take 10% of your bill amount off the tab of your phone. So if you pay $40 a month Your tab goes down by $4. If you reach zero tab, well… the phone is yours if you leave before its paid off you owe the balance remaining. Its not particularly amazing, but at least you feel less concerned about leaving your plan early.

  8. dculberson says:

    “Line of zero bullshit”

    Nice!

  9. zuzu says:

    Seems similar to the ‘tab’ concept of Koodo phones here in Canada. You get a running ‘tab’ of I think $125, to spend on a phone if its cheaper than $125, you pay nothing for the phone, and every time you pay a bill they take 10% of your bill amount off the tab of your phone. So if you pay $40 a month Your tab goes down by $4. If you reach zero tab, well… the phone is yours if you leave before its paid off you owe the balance remaining. Its not particularly amazing, but at least you feel less concerned about leaving your plan early.

    I rather despise what ever it is that’s broken in the psyche of consumers in the United States that they couldn’t grasp or otherwise refused the European model, which makes so much more sense:

    You don’t lease a television from your cable provider.

    You don’t lease a computer from your internet service provider.

    You don’t lease your washer from the water company, or your dryer from the gas company.

    So why the hell do Americans have such a hard time paying $600 for a phone up front, and then taking their business for network connectivity anywhere they please month-to-month?! Why do we have these elaborate schemes of “nights and weekends”, “friends and family”, “mobile-to-mobile”, “My Faves”, with multi-year contracts.

    Telephone minutes are a commodity, like water, electricity, and bandwidth; demand (as market actors) that the companies compete with each other like it is a commodity. Don’t let them bamboozle you into this airline-esque tomfoolery.

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