You know what's worse than showing your
Bitter Beer Face to the world after you passed on Apple's iPhone and let AT&T enjoy the spoils? Raising your early termination fee to stratospheric heights. Just over a year ago, we honestly though this whole
ETF thing was headed in the
right direction, as most of the major carriers (
VZW included) sought to
prorate contracts in order to
lessen the charge as one's contract drew closer to an end. Now, however, Big Red is evidently gearing up to pull a 180, with the slide above showing a $350 ETF for "advanced" devices (read: probably anything deemed a smartphone). The newly hiked rate will go into effect on November 15th, and while that $350 will decrease by $10 per month over the life of the agreement, this pretty much guarantees that you won't be adding a line, disconnecting and then flipping that phone on eBay.
posted Nov 4th 2009 8:42AM
Now thats bull shit.
Why would a service contract cost more than a phone (smartphone)? Please, no one justify it.
Moral of the story? Don't use Verizon.
Just came in to mention that in Canada, if you buy an iphone from rogers and cancel before your contract is up, its $400 for the phone and $200 for the data plan... but i'm sure this $350 is terrible for you guys
Verizon is also charging Droid users 15 dollars for Exchange access. The Verizon nickel and diming begins.
Because the subsidy Verizon pays is higher on smartphones. They plan to make their money back on the data plan, but if you cancel after a few months Verizon isn't able to do that. The current $175 isn't enough to cover the difference between the cost of the phone and what Verizon sells it for under contract. I have no problem with the change, you are able to buy the phone at retail price and have no contract obligations if you'd like.
I can see now AT&T coming out with an ad talking about this here. That should be great.
Perhaps the 350 fee will only apply to netbooks?
This is a good chance for Sprint to pull out an ad as well and claim the lowest prices and termination fees of any carrier, if AT&T and Sprint are smart, they take full advantage of this.
Enjoy your overhyped piece of shit Droid!
And when you figure out that it's no where near as sexy or as cool as the iPhone and you want to sell that shit on eBay enjoy your $350 ETF...
Verizon = FAIL
The only positive about Verizon is the network. And I get excellent service where I live with AT&T and the iPhone (although I do feel for those in NY)...
Sprint please get the HD2!
@Mack
Well, to be fair, everybody charges an additional $15 for exchange access, and they do it on all smartphones capable of using Exchange. AT&T does it, Verizon does it, pretty sure Sprint does, but I'm not sure on that one.
If Sprint did make an ad like you are suggesting, it would need to go along the lines of this:
Sprint: Lowest Prices, Lowest Termination Fee, Lowest Coverage Area, Lowest Customer Service, Lowest Customer Satisfaction; Guaranteed!
@Fernando
Too bad AT&T would never go with this, "Want to look like a douche bag company? There's a change in terms for that."
@Mike
Well, Verizon is mainly pitting Droid against the iPhone and the iPhone gets Exchange access for FREE. To me, this move signals that there will be more hidden costs to come. Verizon is like the scorpion in that old scorpion parable.
"Why did you sting me? Now both of us will drown."
"It's my nature."
Does this apply to only new activations only or existing too? I was able to get out of a contract when they raised texting prices. If they are changing ETF on existing plans, you can get out of your plan by saying they changes the terms of agreement and you can get out without paying anything.
The higher ETF is effective Nov 15. DROID comes out Nov 6. I am ordering it online Nov 6, paying the ETF of $175, taking the DROID to one of the MVNOs that use Verizon or Sprint (Hello Boost Mobile and your $50 unlimited everything plan). Good bye Verizon and your uncompetitive plan costs and your ridiculous ETFs.
@drew
actually, laptop magazine just founf AT&T to have the worst customer service. Sprint was tied with verizon.
@Avi
Based on what I've read over on crackberry (concerning the BB bogo deals Verizon has) you can't buy a phone on contract from Verizon and then a few days later pay the ETF and keep the phone. If you try to keep the phone they will charge you the full price of the phone. I believe the only way to get around this is you have to fulfill 30 days of your contract.
this sucks! now I have no plans on ever joining verizon, but you now that the other telcos (starting with at&t) are gonna follow suite like they always do, and within a year this will be standard across the carriers.
@ OsgoodMEO:
I can understand maybe raising the ETF and then lowering it at a quicker rate like other people were saying. They obviously make their money back on the required data plan for the term of the contract, so why don't customers get a break off the monthly plan once they're off contract, or if they buy the phone out-right?
I don't think they're hurting that much when people pay $175 + subsidized cost of the phone, and flip it. They make more than the difference back on people who purchase that same flipped phone, and activate it, off contract, on a plan that's just as much as the "on-contract" plan. Actually, if the phone gets activated on Verizon's network anyways, they make MORE money. The customers pay for it either way.
Now if they followed T-Mobiles new off-contract and on-contract Everything pricing, then it'd be a different story.
Whats bull sh*t is that 99% of Verizon reps will 'forget' to inform new customers of the higher ETF.
They have to cover their tax increase the Obama and the Dems passed on them. Increasing a cell phone company's satellite fee from $50M to $500M per year is not a good thing for consumers. How's that change working out for you now? Wake the F up people...a tax/fee on companies is a tax on YOU.
Want out of your VZW contract? Want exchange sync?
"There's a fee for that."
Does this mean these Carriers dont get these phones for free like consumers like to think? Also att's been charging 15 bucks extra for exchange ;)
Are we forgetting that a phone is bought 1st) to make calls, and 2nd) to go online with? Why do I care if Verizon has more 3G coverage over a farm in Wisconsin that AT&T doesn't cover? If I happen to drive next to that farm ONCE in my lifetime and I don't have 3G access, I'm sure I won't spontaneously combust.
Luckily I don't live in NY, and over here in the DC Metro area, AT&T is 5 bars & 3G 100% of the time for me.
As if Verizon doesn't rape their customers enough?
@ Spiel -
If your not worried about coverage.. then why not use Metro Pcs instead of ATT?
Metro is like the Tata (Chinese car company) - you can get a NEW product that is semi reliable and very cheap.
OR
You can get the "lexus, bmw, mercedes" version and pay more.
The problem is.. that ATT service (especially here on the Mainline near Philadelphia) is VERY shotty!
Also.. I hate to defend any company that increases fees BUT:
I signed up for the BOGO free blackberry. I activated the 2nd one only to change back to the original phone and sell it on ebay to a guy that wanted it unlocked for GSM. I sold the storm for $375.
I paid $225 with tax for 2 of them. Sold one for $375. So I MADE $150 on it. (minus ebay fees etc) but still. For a few minutes of work I made 150$.
Verizon lets say they paid $300 for EACH blackberry. Thats $400 loss up front. My 24$ a month data plan is going to net them $576
So at the end of the contract I will have made them appox $7.33 per month in data revenue. Clearly not that much considering they have A LOT of data coverage.
They need to figure something out if they are going to be subsidizing phones so much. This works out great for 99% of the people that research and buy the phone (you do have 30 days to decide if you want it). The only people this DOESN'T work out for is the ones that SIGN A CONTRACT THEN CHANGE THEIR MIND! Military get out of the contract, if you move to a zip code that doesn't have coverage, no termination fee etc.
DON'T SIGN THE CONTRACT IF YOU DON'T WANT TO! NO ONE IS FORCING YOU TO! YOU CAN ALSO HAVE THE PHONE AND PAY FULL PRICE.
If apple gave free ipods and said you HAVE to buy 15 songs per month for 24months there would STILL be people complaining! I don't understand it.
Actually, you couldn't use the Droid on Boost because they use two different technologies. Boost is iDEN and all of Verizon's phones are CDMA. I would go further into explanation, but most people who read this site are complete idiots.
Actually joarobdel5, Boost has a CDMA network as well, but you wouldn't know that because you're an idiot. How do you think people get their Blackberrys on there? Did you think there's a mysterious iDEN Blackberry for sale somewhere? Maybe next time you should bring up a legitimate point, like the phone being locked or something.
i was fairly certain that the ETF was not by law allowed to be more than the cost that the carrier paid into the device. since they claim that that is what the ETF was for. and the prorating was put into the law because they said that the repayment was build into the contract.
so Verizon is trying to claim that they pay $350 worth of upfront on these phones.
why am I smelling lawsuits.
People Exchange is added into the 30 dollar data fee
@ n_shakuras: I guess you've never heard of the BB 8350i. Also, Boost's CDMA coverage is still pretty limited afaik.
This is madness!
This... is... SPARTA!
No...this is....VERIZON!
They just lost a potential customer in me. $200 is painful for T Mobile. $350? You can go to hell.
No, this is Patrick.
This is a real shame. I was dead set on leaving AT&T / the iDevice to join the Droid's, but an ETF of $350? Now I'm not so sure. Really Verizon?
C'monnnn! (Say it like the guy in the PS3 ad)
How often do you guys really break your contracts? I mean, is it common practice now to get a new phone before 2 years?
I buy a subsidized phone and then stick with it for 2 years and then change.. Am I not normal for following the contract that you sign when you sign up?
I'm hoping since they are doubling the ETF, we will see a reduction in cost elsewhere - perhaps $15 a month data....or something, lol. How can they justify this???
@Tom Reinke
I get a new phone pretty much every year. But I'm not charged an ETF for doing so. I don't believe that Verizon is going to charge a ETF for upgrading a phone either. They will just charge you full price for the next phone. The ETF should only come into play when you tell them to cancel service.
Yet another thing... DroidDOES
/swats Verizon with a newspaper
Bad! That's a bad Verizon! No!
Place yourself in Vz's shoes. You sell someone a $600 phone for $200. They turn around and sell that phone on EBay for $500+ and just pay $175 to break the contract they signed to get the phone cheap. This person ebaying the phone made 500 - (200 + 175) = $125.
I don't like early termination clauses, but you pretty much have to have them to avoid someone doing just that.
Andir, your math is flawed...you still have to pay activation ($36) and one month service, lets call it $75 for data/voice/text. Comes out to $200+$175+$75+$36=$486, yielding a profit for the end user of only $14, minus eBay/PayPal fees, so you're actually losing a few bucks flipping the phone. I know, I've done it with iPhones, BlackBerries, etc. It's hard to keep costs competitive when flipping....
Here's the thing. The person buying the phone will likely be activating it on... Guess what... Verizon! Verizon will make their money back anyway because they are making extra $$ because the phone isn't being subsidized anymore, even though they are still charging the same for their services.
Unless they buy several phones, and the people that buy them use Sprint.
This ALSO pretty much guarantees my move to Big Red is not gonna happen. Their coverage area had my interested, but I would like to have a regular $175 ETF if I need to get outta contract. $350 is insane!!
Then don't cancel your contract.
Enjoy a shiny new DROID and experience Verizon's excellent 3G coverage and the ability to make and receive calls.
If your state was gonna raise the fine for speeding... would you stop driving altogether? Or would you just NOT SPEED?
@ Michael Scrip
I would still like the ability to cancel my contract, within a reasonable price range. To cancel a contract has multiple reasons:
a) Moving back to my home country for an extended period of time and thus, not worth paying the $99/month fee.
b) Switching service providers for interest in a better plan/phone
c) Missing the simultaneous access of voice AND data on my current GSM provider, but (as mentioned) not possible on CDMA.
etc etc...
It's simple to say "Dont cancel a contract" and then give an asinine analogy of speeding tickets. But some of us just tend to think more about how being bound in a contract can be stifling.
@ Michael
I was not aware that there were multiple companies that impose speed limits.
Sorry, I meant "...that imposed the fine for breaking the speed limit." Either way, your analogy does not hold up.
Fine... my analogy was bad. Who cares. I'll say the same thing without an analogy... don't break your contract... and you don't have to pay $350. Were you excited to pay $175 before?
When did $175 become the "acceptable" rate? What happens when all mobile carriers switch to a $350 ETF? Remember when text messages were 10 cents... then 15 cents... now 20 cents? Yikes!
Yeah... Verizon's new ETF sucks... you better get out and head towards greener pastures soon. I've been on Verizon for years... and I'm happy with Verizon. I guess that colors my opinion on the matter. Sorry.
Uh, if you buy a Droid phone, is there another network that it will work on in the U.S.? Isn't that one of the drawbacks to CDMA?
Pre-emptive move no doubt. In a couple years once LTE is popular worldwide I'm sure there's a possibility to flip devices like all the GSM cats do nowdays.
Yes. Sprint.
That's it, though.
Why would there be a difference between a smartphone user and dumb phone user termination fee? We pay more for the smartphones to begin with and pay more monthly fees.
The problem is that not only do you pay more for the smartphone, so does Verizon in most cases. The phones are subsidized to cheaper prices to entice you in signing a two-year commitment. Verizon pays for the rest of the phone, knowing that over the next two years they will make up for it in the monthly bill that you pay. 175 isn't enough to cover the more expensive phones anymore, thus they raise the price. It seems lame, but I can see the logic behind it.
Now it's only a matter of time for the rest of the "competitive" wireless industry to adopt this policy.
Then we can all just migrate to T-Mobile. We are bound to incur data loss, or complete service loss once a month and earn an additional $100 a month. We could make more than enough in a year to waive early term fees.
Oh god please no I'll have to make my own cell service no contracts for everyone
What was the previous ETF?
Probably $175 like everyone else.
Nice, so now the minimum ETF is basically $120 ($350-23*$10), at least for these phone.
The old "raise the price so you can put it on sale for the old price" trick, in some bizarro-twisted way.
I thought it was limited by law to $175.
How silly, thinking that our representatives would have done something to protect consumers.
Look, I understand where Verizon is going here. A few folks are really gaming the system on the BYGO Blackberries and flipping them on Ebay. That is clearly hurting Verizon's bottom line.
On the flip side, what about the family that buys a handful of phones and, 6 months later, moves to a place with poor coverage in their home. Now they are out $1000+ dollars because none of the big carriers guarantee indoor reception?
How about this: $350 for the first month, but it drops by $30/month until it reaches $175 (~6 months). That way, Verizon stops the Ebay profiteers, and the average user doesn't get burned.
That's funny how it's cool for them to reap profits off your blood and sweat but not for an Entrepreneur on eBay to try and make a few bucks. Also don't get it twisted that people selling this stuff on eBay is hurting their bottom line, yeah right. There isn't enough people doing that in the first place. Also if that was the case why don't they just sell unlocked phones out of contracts in the first place? Oh yeah because then they couldn't nickel and dime you every month for 2 years. Please don't try and defend these capitalists, pigs they got there by ripping off people and nickle and dimming not by fairness and good will, trust me.
Then they can buy the verizon network extender for $250 and have service in their house.
@Fernando
I Agree with both of you, but you'd be surprised how many people have done the whole BYGO free with blackberrys and sell them on eBay, Especially when the sales associate in the Store tells you how!
I know of 6 people who have done it, and where Verizon messed up is by allowing the Storm 2 into the BYGO category. Both of my friends decided to get the storm 2, and both came out of the store with 2 extra NIB Storm 2 units. Sold them on eBay and got an easy $300 bucks each. All they had to do was add another line for $10 and within 30 days cancel it. There's more red tape there, but the bottom line is they didn't have to pay the cancellation fee and they kept the new storm.
Its not right for them to up their prices like this, but I can understand. It was a bad marketing choice on their part and they're having to pay for it.
I like crescentmage's idea. I'd say that it should be $30/mo for the first 7 months, and that would be $140 ETF where the current $175 would be $145 ($5/mo). That's basically a wash, and then they could go with $5/mo after that.
I'm probably going to get the Droid on a 1 year contract. That's $70 extra but much more flexibility.
Typically carriers do allow you to get off service if you move with no coverage, so I don't understand who this hurts besides people who flip the phones.
Also good to see the AT&T/Apple fanboy squads out in full order on this article, mentioning the BS exchange thing, reminds me of the entire death panel things, people just love to make noise here about nothing to justify for whatever reason what network they are on, like who the hell is a fanboy to the network they are on.. but alas here they are.
Hey Verizon,
How about providing an option for customers to not sign a contract and get lower monthly prices in return? $350 ETF is atrocious but someone might still want to be on your network without being bound by such a tight leash and bringing their own phone in. This is one page you could take from T-Mobile's business practices.
Unless you do that, or I find a new Droid for ~$400, Verizon just lost my business.
@mady
Carriers would most likely consider this besides if even ONE company implemented it, our current FCC would say that since "the company made money at these lower rates" they would have to offer them to every customer. Our current government (I dont care what party is in power, talking mindset of the FCC) is very much anti-rational.
I would prefer customers buy all phones retail, this would cost the price to drop quite a bit because manufacturers would actually have to price things competively to sell. Carriers make next to no money on retail devices, it's the subscription that is their bread and butter.
What was the previous ETF? In Canada on Bell it's $400 maximum for _any_ phone. Decreasing by $20 a month. Shit balls.
upranked you for saying "shit balls"
indeed sir you deserve a +1
i had verizon on my g-pas plan, then when dan hesse took over sprint and completely rehashed customer satisfaction, offered lower prices on every data plan (no $35 for a stinking bb) i was sold, ive had sprint since then, and no surprises on my bill vzw, however, you get a -10 if possible
These kind of tactics are indicative of a broken business model. Instead of innovating, they are working to protect what they have in a way that alienates their customers.
Pathetic.
Somebody needs to put Verizon in its place. I am a Verizon customer and would love to see them settle down a bit and get of their high horse.
At least Verizon is staring to get some halfway decent phones but I'd dump Verizon too if my choices for a "smartphone" were as limited as theirs. This new ETF is WACK!
Just in time for the DROID launch.
Funny, I thought only Rogers was capable of such bullshit.
Looks like someone wants to keep all of those DROID customers that will be switching or renewing.
So, we have one week between DROID launch and ETF change. That's enough for me!
If they raise it that much, they should subsidize a hell of a lot more on the phones they sell. If they did that, and say just gave away all "advanced" phones or at least less then $100 before discounts, that would help sell a bit more.
My choice is Verizon, so if they tossed me a free Droid, I wouldn't be going anywhere anyway.
Was planning on getting the droid in December
I guess I will just keep my iPhone 3gs now. I think this will seriously put off a lot of customer planning to switch to verizon.
Same here! iPhone 3GS customer who was gonna jump on the Verizon boat in a couple of months time. Not now for sure!
Well, I was going to make the move on Friday, now I am having second thoughts.
Will decide by tonight if I am going to cancel my droid order and just wait for it to hit Sprint or TMo.
@Sycamore714 >> "Was planning on getting the droid in December. I guess I will just keep my iPhone 3gs now"
Now wait a minute... You were planning on moving to Verizon for some reason... maybe you hate AT&T, you're sick of dropped calls, you wanna try Android 2.0 on a stellar device, etc...
If you move to Verizon... and the DROID is everything you hoped it would be... and the network works better that AT&T... why would you need to leave Verizon in less than 2 years?
So, you're gonna turn down the opportunity to use a DROID on Verizon... because of the small chance that you *might* have to cancel your Verizon contract early?
You now have one month to see if the DROID is something you want. But also take into consideration that the new Verizon $350 ETF is something you might *never* have to use...
The think is there are more then enough customers who will never know what the termination fee is since they don't look at the fine print. This, sadly, won't impact Verizon as much as you would think.
A bit too steep what they are asking for.
They're just begging for government control. Maybe they see it coming and they figure they'll jack people over while they still can.
That's completely fine... if they're giving me $350 off my phone
I've seen reports that the Droid will be $599 without contract... and it is $199 with. If that is accurate, then that's a $400 difference, right there.
I understand why people who might have a legitimate reason to cancel their service would get hurt by this. However, I also understand how Verizon needs to recover the subsidy from people who don't live up to their obligations just to make a fast buck.
What does this say about Verizon's confidence about DROID? From the earlier reviews it seems like a viable iPhone competitor, but now Verizon has gone and spoiled all the fun. First partially killing & now this turd. ATT & Apple are breathing a little easier this A.M.
Because the subsidy Verizon pays is higher on smartphones. They plan to make their money back on the data plan, but if you cancel after a few months Verizon isn't able to do that. The current $175 isn't enough to cover the difference between the cost of the phone and what Verizon sells it for under contract. I have no problem with the change, you are able to buy the phone at retail price and have no contract obligations if you'd like.
Do you honestly think that Verizon or any carrier actually pays full retail for these devices? They are a large business dealing with other businesses. Hence, they make deals and get them much cheaper since they are purchasing many more devices. They do not pay anywhere close to what you or I would pay full retail for any phone. So the whole argument that they lose tons of money is bogus. They may lose a small amount here and there, but they make it back for every person who does not upgrade to a new phone every couple years, for which there are quite a bit.
Yet again a company trying to take advantage of the situation it puts customers in. I am sure it will be well communicated to customers too... :/
Are you serious!?
I was going to get a droid TOMORROW, because I'm already with VZ.
They said I could just renew my contract, but screw that.
If at&t would drop their iphone cost by 20 bucks, I'm there.
$20 is seriously all that's holding you back?
LOL
for me it's gotta be $21 and no less.
Will somebody on this website please read for once?!?! To all these people talking about wanting to get a Droid on launch day, but now won't, this goes into effect of the 15th, NOT today, NOT the 6th when the Droid launches, but the 15th! Get your Droid on launch day, and get a $175 ETF rate. Easy as that!