The Early Termination Fees of Wireless Phone Contracts

Have you ever signed a contract to subscribe to a certain type of service? If you have, then you probably encountered the term, termination fees. Service industries such as mobile phone service and subscription television commonly have termination fees or early termination fees as they are more commonly known.

The process usually works this way. A person purchases cellular phone service from a particular wireless carrier. He or she might be required to sign a two-year contract in order to avail of the service. Now that contract might stipulate a $200 fee in the event that the customer breaks the contract or wants to opt out of it.

However, the imposition of these termination fees has been criticized by consumer interest groups. These fees prevent users from migrating to superior services so they are labeled as being anti-competitive. A lot of people would rather stick to their old network, rather than pay a significant fee to move to another network or wireless phone carrier. More and more people have spoken out about this unfair practice and it seems that their complaints have finally been recognized.

The clamor and the disputes about the unfairness of early termination fees in wireless phone contracts have lead to positive changes in the last couple of years. Verizon wireless was the first carrier to give in when it announced that it will prorate its early termination fee. AT&T followed Verizon's lead and other carriers namely, T-Mobile and Sprint, have also decided that they would begin prorating their ETF in the first half of next year.

Now, what does a prorated early termination fee entail? The customer will still have to pay a fee for ending the mobile phone contract abruptly. However, the amount will decrease as the decision to end the contract early gets closer to the contract end date. This means that a customer will no longer be forced to pay the original fee if he decides to end the contract.

Here's a list of the current termination fee for each major wireless phone carrier:

Alltel: $200 per phone line

AT&T: Prorated

Sprint: $200 per phone line (to be prorated next year)

T-Mobile: $200 per phone line (to be prorated next year)

Verizon: Prorated

So far, Alltel has not made any announcements on making its ETF prorated. However, it may lose customers if it remains as the only major mobile phone carrier to have a non prorated early termination fee next year. It would be logical to assume that the company will also follow the examples of other wireless networks to keep their consumers happy. After all, the wireless phone industry is hot contested and any shift in policy or program of a cell phone carrier may send loyal supporters looking for a better alternative.

Joem Hughes writes articles about wireless phone networks, wireless plans, and wireless phone contracts. He hopes that he can contribute useful information on various wireless phone topics through his articles. He also makes sports articles at Pinoy boxing.

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