The Dow Jones Newswire reports that AT&T is nearly doubling the fees smartphone-toting customers will have to pay if they break their contracts early — bumping the fees from $175 to $325 beginning June 1. The move comes only a few weeks before Apple is widely expected to unveil its next iPhone, which will likely be available in the US exclusively through AT&T (at least at first). Thing is, AT&T is claiming that the iPhone has nothing to do with the move — a spokesman tells us “The timing for the new ETFs isn’t being driven by any specific device.” Uh huh.
As the WSJ article points out, it’s pretty clear that AT&T is looking to take advantage of the slew of customers certain to re-up or sign new contracts when the iPhone comes out. This boosted ETF is more likely to keep all of these customers chained to AT&T for another two years — even if the iPhone makes its way to Verizon, which has been rumored to happen later this year. Assuming the rumors are true, Apple is suspected to be giving AT&T a few months where it will retain exclusivity, so it’s no surprise that AT&T would want to make the most of them.
We should point out that Verizon similarly increased its ETF for smartphones to $350 back in November, right as the very popular Motorola Droid launched, so this isn’t unprecedented. Verizon’s ETF increase probably contributed to the FCC’s decision to launch an investigation into high carrier termination fees in the mobile industry. AT&T’s move today seems to indicate that that’s no longer a concern.
The only plus from today’s news is that ‘feature phones’ and other less powerful devices are having their fees slightly reduced, from $175 to $150. An AT&T spokesman says that these changes “reflect the way customers buy our products and services”, going on to explain:
Those who buy less expensive devices and lower priced service plans will pay a lower ETF in the event they terminate their contracts early, and consumers of more expensive devices and service plans will pay a higher ETF for terminating their higher priced plans early. Our new structure was designed to be fair to all our customers.
Image via Mark Coggins