AT&T is about to make it more difficult for new iPhone users to break their contracts. The Wall Street Journal is reporting that the carrier will be raising its early termination fee (ETF) for smartphones and 3G netbooks from $175 to $325 as of June 1. An AT&T spokesperson confirmed the news with VentureBeat, and the company has since issued a press release.
The change won’t affect existing customers, only those signing up for new contracts. Still, it’s an opportune time for AT&T to raise its ETF fee — it’s very likely that Apple will debut its next generation iPhone in June at its Worldwide Developers Conference and make it available for purchase later in the month. The move will make iPhone owners less tempted to jump to another carrier for the iPhone (if it makes its way to Verizon) or another smartphone platform.
The good news out of the announcement is that the ETF for basic and messaging phones will be reduced to $150, and will be reduced by $4 for each month subscribers stay in contract. For smartphones and netbooks, the ETF will be reduced by $10 every month.
The new ETF is still $25 lower than Verizon’s $350 fee, so it’s not as if AT&T’s move is unprecedented. We reported in January that the FCC was looking into early termination fees, and at that point AT&T had defended itself with its $175 ETF, which was lower than most of the competition. We’ve reached out to the FCC for comment regarding AT&T’s ETF increase and will update when we hear back.
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