Verizon announced yesterday that they are doubling their early terminations fees, to reach as much as $350 for some users. I have never understood the use of early termination fees as an alternative to providing service people want in the way that they want it. I also do not buy into the claim that all those long-term contracts are supporting expensive hardware that users are getting at a reduced rate.
There are a dozen reasons why someone might need to cancel a phone contract. A job transfer could take them to a location that doesn’t have good service on their existing plan. The loss of a job can mean that the cell thing is the first thing to go. Poor customer service, or not getting full value out of the service you thought you purchased could be another reason to drop a plan and go with another. Cost can also be a factor; comparing your current plan against other carriers can often show you where you can save a little money. None of these things are unusual, unexpected, nor should they be punishable. If I change brands of cat food, I don’t get penalized. If I stop eating at one restaurant in favor of another, I am not penalized. We like to change our minds, and we like to have the freedom and choice to do so.
Adding hefty early termination fees to already ridiculously inflated service plans isn’t the best way to get me as a customer. You can market me until you’re blue in the face, but if I feel like I’m going to be taken advantage of, I am going to walk away. I don’t mind paying a fair and reasonable price for decent service, and I don’t mind that wireless carriers are making a little profit. What I do mind is that wireless carriers are making billions of dollars in profit, yet fuss that they do not have the capital to invest in expanding their infrastructure and wireless architecture to give us better service. It is like the brother-in-law who borrows $300 to pay his electric bill, doesn’t pay you back, but shows up at your house the next month with a new car. I don’t have much sympathy for that kind of economic game-playing in people, I certainly don’t want to see it in my wireless carrier.
When wireless carriers can show me that a cell phone, even a smart one, costs several thousand dollars to produce, then I might change my mind. But until then, I am going to ride my carriers hard and expect a lot out of them. That is what I’m paying for, and I expect to get it. Doubling up on early termination fees just took one carrier out of the running, in my mind.
If you don’t like the contract, don’t sign the contract. There are a wide variety of contract free pay as you go phones to choose from – including unlimited minute plans.
You are clearly in the minority of cell phone buyers not using pay as you go plans. It’s the phone companies network – not a public service. They paid for their slots of frequency. They pay for their hardware. They get to earn whatever profit the market will bear. You’ve got many choices. But if you can’t live without a smartphone – pony up the money and stop crying.
If a smart phone does not return to you more then you pay for it (in either business done/revenue generated ie the blackberries) or personal enjoyment (ie the iphone) – you should use a cheap alternative. If you are getting the utility you desire from a smart phone – again, stop crying about it.