Media Center

Media Center

Keep wireless service early termination fees far from user pools

Verizon charges individual subscribers $350 for early termination of a smartphone contract, and AT&T charges $325.

Some companies think that if they negotiate a “lower price” for their wireless Early Termination Fees (ETFs), they’ve done an adequate job.

Wrong. This level of ETFs was meant for the consumer arena, and a “lower price” for the ETF in a corporate deal is the least you should be getting.  Employee turnover being what it is, any material early termination charge is going to cost your company a lot of money unless you take broader action.
 
You can and should endeavor to keep ETFs on individual line terms as far away as possible from your corporate deal. One way to do this is to ensure that line terms are not constantly reset back at zero, which repeatedly forces you to “keep” each line for another one or two years to avoid fees. Your deal should specify that line terms do not “restart” when users change rate plans, or add a feature, and indeed only restart when a user receives a new device upgrade. There are many other best practices that we use to help our clients avoid or mitigate the sting of ETFs. But you can’t get any of these terms if you don’t make them a requirement early in the process. They should be priorities in any wireless procurement.