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VerizonWireless to change policy on termination fees.

Have you read the fine print of your wireless phone contact, or maybe I should say read the contact in general? All carriers have a clause detailing an early termination fee (ETF). I was told once that one of the reasons for this fee dealt with the value of the device that was sold/given to you with the service. The fee was to help offset that price.

Now things looks as if things will be changing. Denny Strigl, CEO of VerizonWireless, in a keynote address at the Yankee Group 2006 Wireless leadership conference on June 20, 2006, announced that VerizonWireless would be the first to prorate their ETF.

His statement;

“I’m here to tell you that Verizon Wireless will be the first major U.S. carrier to commit to a national policy to pro-rate our ETF. Specifically:

o We will include new terms in our contract that will pro-rate the amount the customer has to pay if they leave us during their contract.
o We will do this for new and existing customers who sign a new contract.
o We’re going to design the pro-rate so that the ETF for the customer goes down as the contract progresses – and at the same time we recover our handset subsidy and other upfront costs.
o And, we will make this change this fall.”

It’s about time that this change occur. Usually all it takes is one of the carriers to make a decision, such as this, and the rest will follow. It happened in the past when VerizonWireless was the first to embrace that idea that Portable Number Mobility (you could carry your number from one carrier to another) as well and not wishing for their subscribers to be part of a wireless directory.

The text of his speech can be found at;
http://news.vzw.com/investor/DFS%20Yankee%20Group0628.pdf

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