Early termination from Cingular

Usually the only ways to get out of a contract without paying the ETF are: 1) if you die, 2) if you are military and get shipped overseas, or 3) some carriers (such as Sprint) will let you out without penalty if you move to an area where they do not sell service. Other carriers (Verizon) will not let you out without penalty even if you move outside an area where they sell service.

A fourth possibility is to have a documented history of so many problems that they waive or reduce your termination fee. Verizon reduced mine because they screwed up so much. You have a $300 credit from Cingular...that should cover your ETF.

You don't need to give back your phone either...I've never heard of such an arrangement anyway.

 

With Verizon if you move to an area outside their licenced market, say to the thumb of Michigan or something like that, they will let you out without penalty. Its always been that way.

 

Interesting. Must be the different policies from one market to another thing again, because in Florida I was told I could not cancel if I moved outside of a licensed market. Of course, could be that the CSR that told me this had no idea....

 

What companys will let you cancel if you move out of your local aera?

 

"Other carriers (Verizon) will not let you out without penalty even if you move outside an area where they sell service."

They will in California, T-Mobile and AT&T will too I hear.

 

YAY, I get to vent about early termination fees. I hate them. What I really hate is that if I only sign a one year contract with Verizon and decide I dont like Verizon anymore after say six months, I have to pay $175. If I sign a 2 year contract I'd still have to pay $175. However, with a one year contract they only offer you a $50 discount off of a phone. and with a 2 year contract they only offer you a $100 dollar discount off of your phone. And they tell you when you sign the contract that the early termination fee is for the discount on the phone you get at sign up. Well in that case the ETF should not be allowed to be higher than the cost of the discount given on your phone plus the cost of the waived activation fee. meaning I should not have to pay over 80 (50 dollar discount + 30 dollar activation fee) to terminate my contract if it was a one year contract. and i should only have to pay 130 to get out of a two year contract. Keep in mind that im very happy with verizon and do not wish to leave. Also keep in mind that most if not all other major carriers in this country have a pretty similar system. I just think its an f$%^ed up system.

 

They base their costs not only on the phone but overall "acquisition costs" which are $300-$500 depending on carrier per phone line you set up. This includes the phone cost, advertising, and commission costs to the sales rep.

A company may only make $20-$30 per month off the average customer monthly after cash costs (ARPU minus cash cost per customer). At this level a company may take a year or more (for some less profitable carriers) to make their initial investment up for the average customer.

That is why companies have contracts... to keep you with them at least long enough to break even and make a little profit.




EXAMPLE - from SunCom's (Triton PCS) actual financial filings in 3Q03 available at tritonpcs.com
(Remember, generally earnings releases try to make the company look good financially)

Acquisition cost: $451 per customer (phone subsidy, promotions, and commssions minus activation fee and what you pay for phone)

Average revenue per customer: $57.29 per month
Cash costs per user: $38.71 per month (network, overhead, etc.)

SunCom generates $18.58 per month per user taking just over 24 months to make up the $451 initial investment

In other words, if the average SunCom customer disconnects service right after a 2 year contract ends SunCom made no money whatsoever. If that customer disconnected after 1 year then SunCom lost $228 which it will recover only $200 of that with the ETF.

This is why companies need contracts!

 

Well put, A999!

As always, it is about the money. What people don't realize is that the phones are getting more and more expensive, but most people won't pay more than $100 for a phone....

A carrier could try no contracts and no phone subsidies, then they would be laughed out of business in 6 months.

 

Get your plan in Florida, or one of the other states that put restrictions on it. It is prorated over the length of the service agreement applies to subscriptions in the following states: FL, GA, SC, NC, AL, KY, TN, LA, NY and parts of IN and NJ. You never have to pay the full fee unless you cancel in the first month after the trial period.