May 21, 2010
At AT&T, we work hard every day to provide you with a great wireless experience at competitive prices.
One of the ways we do this is to offer you the industry’s leading wireless handsets below their full retail price when you sign a two-year service agreement. In the event you wish to cancel service before your two-year agreement expires, you agree to pay a prorated early termination fee (ETF) as an alternative way to complete your agreement. Of course, if you prefer not to enter into a term commitment, we offer the same great selection of devices at their full retail price with no term commitment or ETF, as well as prepaid GoPhone options.
We are now making changes that will lower the ETF for many customers who agree to new term commitments, and will increase it for others. Current AT&T wireless customers who are within their two-year consumer service agreement or have an existing enterprise service agreement will see no change to their current terms.
Beginning June 1, 2010, we will reduce the ETF in new and upgrade two-year service agreements for all customers who are buying basic and quick messaging phones. Whether you are new to us or upgrading handsets, the ETF will decrease to $150 from $175, and be reduced by $4 for each month that you remain with us as a customer during the balance of your two-year service agreement. After the term commitment is completed, the ETF will no longer apply.
MacDailyNews Take: Is a lower ETF on devices that nobody wants really a lower ETF?
AT&T continues,
For customers who enter into new two-year service agreements in connection with the purchase of our more advanced, higher end devices, including netbooks and smartphones, the ETF will increase to $325, and be reduced by $10 for each month that you remain with us as a customer during the balance of your two-year service agreement. After that, the ETF will no longer apply.
Thank you for being an AT&T customer. We hope you enjoy your AT&T wireless device and service. We appreciate your business and we will continue to work hard to earn it.
MacDailyNews Take: Does this mean that there’s a Verizon iPhone coming soon or is this just business as usual?
Is this in preparation to any comments Steve Jobs will make at the WWDC this early June regarding the iPhone and iPhone OS 4???
took them long enough.. I was expecting them to do this right after verizon did it.
Here comes Verizon. I’m actually very happy with AT&T;so I’ll probably stick with them. But we had the other signal last week that AT&T;was moving up dates for people to get their subsidized iPhones. This is it!
So it starts at $325 on day 1 of the contract and gets reduced by $10 each month thereafter.
Could be worse.
Well, its not just for iPhone. Have no way to know what this means without a comparison of what the other charge.
These articles are shit without telling the full story, with detailed cost comparisons.
Of course, that would take the asswipe journalist a lot of time, and would lessen their hit whore headlines that are so misleading
Verizon will probably sue over some trademark infringement.
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Verizon on the horizon baby!
Where the hell is the damn tethering? I am really pissed off about this. I joined ATT with an iPhone 3GS (awesome device) in December 2009, knowing that tethering would be available by the end of 2009, because ATT promised it. Well 2010 is here, and still no tethering. Apparently in this day and age it has become acceptable in America to lure customers in by lying to them.
Well, dammit, I don’t think so. ATT can SmyD.
Looks like the iPhone MAY be coming to a Verizon near you.
Look out, the iPhone sales are going to triple and Android topple!!!
Why else would they do this? Competition from a rival, that’s why.
Would like that PROMISED iPhone tethering for my iPad soon. I have been looking at some of my other options. Sprint as a 3G/4G mobile WiFi bridge that they offer. Maybe one of those prepaid crap cell phone will offer a tethering option.
Steve Jobs should just invite their CEO over for a little one on one talk. I know Steve heard the giggles in the audience the last time he talked about this.
Still cheaper then Verizon’s
AT&T;iPhone tethering is right up there next to the 3 Ghz G5 Mac Steve Jobs promised us in 12 months from his June 2003 keynote…
Blame IBM then or AT&T;now, but wasn’t it Apple that did the partnering with those other companies?
If I recall, didn’t AT&T pull back the calendar as to when users are eligible to buy a new iPhone?
AT&T is not in the business of subsidizing your phones for free. It cost them money if you don’t go through your contract.
Used to be 2 years, now it is 32 months. I think the FCC should eliminate ETFs entirely. That would improve the competitiveness of the industry. I.e., do a good job or else we take our business to someone who will. Instead of the current, ‘we will punish you for leaving due to our poor service’. If these companies did a good job, they wouldn’t need an ETF to keep the business.
Ha! Come to Canada.
iPhones are ALL 3-year contracts and $400 termination fees. Plus $200 TErmination fees for the Data plan… or something like that.
This, plus the move-up date for contract renewals to June is the first REAL indication IMHO that the iPhone is coming to Verizon.
Connecting . the . dots …
oh well. it was bound to happen. are you actually surprised? I am gonna get a good chuckle if steve doesn’t mention anything about verizon. and if he does. it won’t matter. either way i will still have an iPhone that works.
Name your mobile carrier, and they are a bloodsucking money greedy company.
It’s a contract, obviously there has to be a monetary punishment for breaking it
I so don’t care about tethering. I don’t think I really even need an iPhone any more.
Okay, kidding. But it doesn’t get the kind of use it once did.
For those who believe in promises made by a mobile carrier.
You’re so cute
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I was promised a hover board from “Back to the Future” once.
First thing that comes to mind is this is a deterent against leaving ATT or switching – the stick.
The carrot is probably the announcement of tethering
Maybe ATT is looking forward to vzw iPhone so that they have the capacity to allow tethering. More likely, they’ll announce that tethering will only be allowed on OS4.0. I’m thinking that 4.0 will allow you to pay for tethering just like the ipad pays for its 3G. ie, “need to tether this month? pay $30”
Gotta keep up with the verizons
Please let there be Competition on the iPhone in USA!!!!!!!!!
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If Verizon gets the iPhone then my company will pay for mine and then goodbye AT&T;when my term ends!!!!!!!!!
AAPL stocks will go Up and more iPhones will be sold!!!!!!!
I’m guessing the change is due to the expected flood of converts to Verizon once the CDMA iPhone is released. That won’t be for a while yet, but AT&T;is trying to avoid the bad publicity that would come if they raised the ETF a month before the flood began.
Love the timing. This tells me iPhone is coming to Verizon. ATT wants to lock all the new iPhone customers I’m this summer so they won’t switch to V when iPhone goes to Verizon in the fall.
@this guy, “Still cheaper then Verizon’s’
Cheaper ‘than’ also.
It could be Verizon coming. Or it could be Apple renegotiating a much higher “exclusivity fee” to let ATT keep its advantage over everyone else for a bit longer. Therefore, it costs more to terminate a “smart phone” contract because it costs more for ATT (up front) to gain an iPhone customer.
screw Verizon. they have crappy customer service, their billing and online statements suck. So want the coverage may be a little better, I have NO coverage problems with AT&T;. And I can talk on the phone and be on the internet at the same time.
Hmmmm… I qualify for my full iPhone discount this November, instead of next June. So I don’t have to wait two years after all.
But they better get on with it regarding the bloody tethering.
Hey MDN! Please post those email adresses/telephone numbers of those a%*holes that were suppose to have given us tethering since yesterday.
This has to do with avoiding black market buyers from abusing ETFs.. Me thinks
No wonder that ATT executive didn’t fear mass defections to Verizon for the CDMA iPhone. They’ve been planning to increase the amount of pain iPhone customers encounter should they choose to leave the network.
It still won’t be enough, however.
Nothing will stop the millions of iPhone customers who can’t wait to break free of ATT’s shackles and finally get the good, dependable service that such a great phone deserves. No longer will their network be a caveat, a bitter pill that must be swallowed in order to have the phone they love.
@Moolatte re “Ha! Come to Canada.
iPhones are ALL 3-year contracts and $400 termination fees. Plus $200 TErmination fees for the Data plan… or something like that.”
Why wouldn’t you check it out first before posting?
This only makes sense to me, as much as people hate paying for something they’re supposed to. Fact is, at $199/299, AT&T;is subsidizing the purchase of the iPhone by more than $325. Try to buy one with no contract and you’ll see what I mean.
It also makes sense that cheaper phones that aren’t subsidized nearly as much should have a lower termination fee.
Villify AT&T;all you want, but this to me is nothing we have a right to complain about. You don’t like it, don’t renew when your current contract runs out or don’t get a new contract with them. Pay full retail and enjoy your freedom— which will cost you more than buying into a contract and cancelling early.
YAYY!!! Down with AT&T;finally. Bring on the Verizon, baby. >=)
Best sign of upcoming Verizon iPhone so far.
Tried to cancel my iPhone contract w/ AT&T;, but the calls kept dropping…
@madgunde
Actually, no it doesn’t make sense. The thing people never realize is that if they are supposedly subsidizing it, if you bought one at full price your plan should be cheaper then. Well walk into ATT with a phone you bought off, lets say eBay, and see the price of the plan… It’s the same rip-off price.
That is why all cell phone companies suck and the subsidization is crap either way you look at it; As well as the reason why you should always get your newest phone and sell your old one.
Puh-leeze let the Verizon rumors be true! I am ready to not only kick AT&T;to the curb, but to crush their skull with a concrete block, knife open their abdomen and defecate on their spleen.
And euthanize their little dog, too.
MDNMW: water – as in piss on AT&T;
Irrational much?
@Jeff…
google the term “MyWi” or “rock your iphone”
$9.99, it’s never been so easy to jailbreak, or unjailbreak an iphone, and you turn your iphone into a wifi hotspot.
Good luck with that. I seem to remember tethering will not work with the iPad. In large part – because I don’t believe the dock connector will support a LAN feed.
Well, I require my iPhone to be able to make phone calls. Simple request. I’ve had it since birth. Still barely usable as a phone. If apple doesn’t move to other carriers I’m done. Android, here I come.
Ape prides themselves in ease of use, yet 3-4 years later, still can’t use my phone as a phone. Sorry, doesn’t cut it.
Neighbor has a droid, crystal clear and works great.
Time to leave I’m afraid. Apple, it’s been a good ride, but I’m no longer convinced.
I never really learnt to use an Ape properly … Chimps tho’ are a cinch to use, I barely read the instruction book.
@Sonya,
You are a total idiot… The reason for ETFs is that they SUBSIDIZE the phone when bought under a contract… That means, brainiac, that they PAID Apple the full price of the phone and make that back over time…
If subsidies were banned, then the iPhone would cost $499, $599 or $699, just as it does for those who buy unsubsidized phones…
If anything should be banned, it should carrier locking… T-Mobile’s coverage is an utter joke compared to AT&T;’s and there are no other GSM carriers in the US, but I should still have the freedom if I buy the phone WITHOUT a subsidy… Conversely, if I get it under a contract subsidy, I should have to stick with the contract or pay back AT&T;the difference for helping me get the phone at a lower entry point…
That’s what they are doing…
You don’t have be be a genius to see this, but obvious that idiots like you can’t.
JustMe
Where I live T-Mobile has excellent reception. I dumped atnt 3 years ago because I couldn’t make calls to my wife where she works. I had to go out on the deck to get one bar. Buddy, it all depends upon where you live as to which company has better coverage.
When Verizon jacked their ETF. Was everyone speculating that some certain Android phone or Blackberry was AT&T;bound. No it’s just business. Coincidence it’s before the new iPhone. No. This to protect themselves for all devices across the board, just like Verizon for the folks trying to scam getting bulk phone orders. Remember all companies give you a 30 day grace period to make sure the service YOU require is met. YOU DON’T HAVE TO HAVE AN IPHONE!!! yes it’s great, but if at&t;doesn’t meet your needs be smart. Business users is another story.
It seems to me that AT&T;has a right to recover its investment in its cell phone subsidies if a customer fails to uphold their end of the 2-year agreement.
Perhaps it would be better if the early termination fee was tied directly to the subsidy AT&T;outlays for each specific phone. Similarly, the early termination fee should decrease at the rate of 1/24 of the the value of the subsidy per month over the life of a 2-year contract.
For example, if AT&T;pays Apple $500.00 per 16GB iPhone 3GS for which it charges $199.00 upfront, then the value of the subsidy for that phone would be $301.00. The early termination fee would then be $301.00, and it would decrease in the amount of $12.55 per month over the life of a 2-year contract.
Similarly, if AT&T;paid Nokia $695.00 for their latest iPhone Killer, and charged its customers $199.00 upfront, then the early termination fee for the Nokia iPhone Killer would be $496.00. Likewise, the ETF would decrease by $20.66 per month over the life of a 2-year contract.
What say ye?
By far, the biggest let-down in the whole iPhone experience is ATnT – poor 3G reception, poor Edge reception, slow/no data speed, and outright lies about tethering.
I wish Apple would just ditch those bozos already. We know ATnT sucks, let’s try something different.
As for the price ETF increase, I hope some sort of class action suit puts an end to that nonsense. They lie *and* raise fees?!
Tsk tsk, Steve-O. ATnT is sharting all over the iPhone platform.
“I’ll gladly pay you Tuesday for a hamburger today.”
I see the brain surgeons are all out in full force on this one.
@ Sonya: No EFT no subsidy; no subsidy, much higher priced phones period
When a carrier sells you a phone for less then they pay for it, they need some sort of guarantee that you are going to stay with the company in order to recoup their initial loss. Customers are so fickle have so little comprehension when it comes to what a cell phone actually costs that if no EFT’s were in place you would have people switching carriers left and right when their phone breaks, or when it’s lost or stolen just to get the phone at the new activation price. Probably much less for reception since their was probably another reason they went with that carrier in the first place ( i. e. Phone model
or price of service plan.) Now, is that fair to the carrier?
@ Sherman: (another brain surgeon) Trust me, the ARE subsidized! I owned a cell phone store. I know what I paid for a phone and I know what I sold it for. Does anyone really think that Motorola or Nokia phone they got for free cost AT&T;nothing to purchase? Every phone I sold, I sold for at least $100 less than what I paid for it. That means those free phones cost me a $100 a piece! Forget what you paid on eBay or anywhere else for the phone, and don’t think that just because you paid full price for a phone you are entitled to a cheaper rate plan. Paying full price means you don’t have an ETF. You are benefiting by being able to leave whenever you want to. You want a cheaper plan? Then convince everyone to give up their free phone or $99 iPhone and pay full price them. At that point it would make sense for the carrier to charge less for the plans. Just look at Metro PCS if you want an example. And remember, the iPhone really started to soar to popularity when AT&T;started subsidizing the phone. There was no way the casual consumer was going to pay what they were initially asking for the phone. Especially not to the numbers that they are doing now.
Don’t agree with me, that’s nice. I’m on the inside on this one, and speaking from knowledge not emotion.
Do I have space for the Verizon thoughts? It’s easy to assume that this all means the iPhone is coming to Verizon. It is also easy to overlook that this all just coincides with the release of the iPhone 4.0. My money is on the fact that AT&T;wants people to get into the new iPhone and make sure they stay there. The iPhone is heavy data and data is where it is at for these carriers. Voice is becoming marginalized by carriers like Metro PCS. AT&T;is making an investment into the iPhone 4.0 and they just want to protect their investment and of course their turf when 2012 eventually rolls around. But it is nice to dream isn’t it?
BTW Sprint offers an option to not have an ETF, however you must pay a higher monthly service fee.
It really doesn’t matter. The day Verizon offers an iPhone is day I leave AT&T;. Their customer satisfaction can’t go much lower.
Could this simply mean that a better subsidy is on the horizon?
As disgusting as AT&T;is, the sad truth is that they are absolutely no worse than Verizon. We won’t be rid of the stink of either of them until the day when all the mobile carriers go down in flames because their crappy services have become unnecessary. People should be using the internet for telephone service, not using mobile carriers to get on the internet.
@ob1spyker:
Your spiel sounds reasonable, but it’s pure hokum. If ETF’s existed solely to allow carriers to recoup the cost of handsets, why is the ETF activated again and again every time the customer changes anything in their current plan? If the customer gets a new phone, then the carrier’s investment is obvious. But what if I don’t change my phone, just my plan? Let’s say I increase my monthly allotment of minutes. What happens then? AT&T;(or Verizon) slaps me with a new ETF, and they’ll keep doing it til the end of time. The carriers are thieves and liars, and anyone who defends their criminal policies is an idiot.
I don’t see how this act by AT&T;shows that there’s going to be a Verizon iPhone. Can some give me an idea of how that’s possible?
Seems to me the other possibility is that the new iPhone may be a much more expensive device to produce. To offer it at the same price and same plan rate (and avoid all sorts of public outrage) they’d have to make up the difference somewhere.
Doesn’t that sound like a more reasonable explanation?
ChrissyOne
I so don’t care about tethering. I don’t think I really even need an iPhone any more.
Okay, kidding. But it doesn’t get the kind of use it once did.
You may be on to something there. I wonder if people might buy a basic phone + a 3G iPad and save some money overall, since the iPad can take over the data needs.
I got my iPhone the day after Verizon attacked the iPhone with their ‘iDon’t’ campaign.
It’s rumored that Verizon is teaming up with Google and HP for an iPad Killer (i.e., poorly done buggy clone).
Why would Apple want to do business with Verizon after these two stunts?
Is attacking a product you want to sell a good marketing strategy?!
Is entering a partnership with Google, an apparent new Apple nemisis, a way to woo Apple with a contract for the iPhone?
Yeah, and Saddam Hussein had Weapons of Mass Destuction ; )
This could be to get iPhone users to stay with AT&T;if the iPhone goes to verison!
Look..
It’s very easy.
ALL THE CARRIERS SUCK. PERIOD.
AT&T;is a for-profit business. When you buy an iPhone, you get a $400 discount off retail price. So when you break that contract that you signed when you bought that iPhone, you have to pay a fee to do that. That’s capitalism.
AT&T;is a legendary American company that dates right back to Alexander Graham Bell. AT&T;Bell Labs invented dial tone, first trans Atlantic voice communication, the transistor, UNIX, the first solar cells, first high frequency radar, first electric & digital computer, first digital voice synthezier etc.
AT&T;is investing BILLIONS of $ to build out their data nationwide network. Name another company that can match that record.
@alansky
The ETF does NOT restart if you simply change your AT&T;plan. The ETF is solely to recoup the cost of the subsidized phone in the event that the customer bails on their contract. You can change your plan anytime. That does NOT start your contract over, or extend the ETF. Not at AT&T;anyway. Maybe Verizon does that.
This will only push customers to Verizon right after their existing contracts expire. Even if no iPhone runs on Verizon’s network.
@ Ross: Thank you for some sanity
@ island girl and ChrissyOne: that’s something I’ve been thinking since I got my iPad. With the data plans from AT&T;so reasonable and NO CONTRACTS (No ETF) associated with them, coupled with a reasonable minute and messaging plan, for your cheaper phone, you definitely can find room in your monthly wallet for the iPad. In the long run it would be about the same or less and you are getting a much more robust
Internet experience. It’s a trend that i’m interested to see develop.
Although I do like the vertical synergy that the iPhone, iPad, and iMac offer. Steve jobs may yet rule the world. I wonder where Apple would be now if he hadn’t gotten run out of Dodge.
Greedy? Wow … Consumers want “free” phones, which the carriers are expected to pay for out of service fees, but can only do so if the subscriber stays on the network long enough to recover the subsidy. Who exactly is the greedy one, the person wanting a free device and no commitment or the one looking to enforce an agreement?
I think it’s right by AT&T;. People sign a contract, they should not cancel.
@ob1spyker
First off, I am a brain surgeon as much as you have “inside knowledge.” Second, you are actually validating my point. I WANT to buy a phone for full price, while paying less monthly for plan so the crooked carriers don’t have to “re-coup” their fees. Phones last out of their contract easily, so why replace them and pay more subsidies to the carriers..?
Thank you for proving my point…