Telecom Expense Management, Mobile Device Management, and Carrier Services Blog

AT&T, Sprint and Verizon Wireless Early Termination Penalty (ETP) Eliminated

Posted by Noel Huelsenbeck on Tue, Dec 04, 2007 @ 06:05 PM

On October 1st Verizon Wireless announced:

Customers Can Change Calling Plans Without Extending Contracts; New Policy Now Part of Industry Leading Worry Free Guarantee

On October 16th AT&T announced:

Beginning in November, customers who change to any one of the company's standard wireless calling plans during the course of their contract will no longer be required to extend their current contract or enter into a new one.

In addition, those customers who choose to exit their contract early will no longer be required to pay a flat early termination fee. Instead, that fee will be progressively lowered during the term of the contract. Beginning early in 2008, this early-termination policy will apply to new and renewing wireless customers who sign one- or two-year service agreements. More details will be forthcoming at that time.

Then on November 7th Sprint followed suit and announced:

Beginning Monday, Nov. 12, as part of the company's pledge to enhance the overall customer experience, customers will have even more flexibility by being able to change their rate plans without having to renew their contracts.

Corporate accounts have long had the ability to upgrade or downgrade plans without a contract reterm but for consumers that hasn’t been the case. However, the new policy may affect some businesses. Companies that allow employees to expense their mobile costs (individual liable) rather than having a corporate plan will now have more flexibility when employees need to move from high minute plans to low minute plans or vice-versa.

In these situations the employee is ultimately responsible but as the company is paying the bill as an individual employee expense the employee may not be motivated to change plans since they would have incurred a one or two year contract renewal prior to the policy change. The company then ends up paying for an expense that’s higher then necessary.

Now the carriers weren’t being nice of course, they’re hand is being forced by lawmakers and class action lawsuits. Here’s a little more background on the events unfolding.

Sprint also announced a more aggressive upgrade policy:

"New For You" Handset Upgrades

This valuable upgrade program offers savings to current Sprint customers on the newest, most innovative phones and connection cards. That way, long-time, loyal customers can continue to enjoy the same great services while keeping up with the latest technology. Existing customers may be eligible to receive savings of up to $150 off devices if they have been a customer for 22 consecutive months. Visit Sprint.com/upgrades for full program details and eligibility.

The upgraded phone policy will allow more folks to upgrade to Smart Phones, potentially making them more productive with work related communications.

Topics: early termination penalty, Verizon Wireless, Sprint, Handset Upgrade

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